USD/CAD drops below 1.3040 ahead of BoC's Business Outlook Survey

• WTI posts modest daily losses, trades below $59.
• US Dollar Index posts modest gains on Monday.
• Coming up: Bank of Canada's Business Outlook Survey.

The USD/CAD pair closed the previous week 70 pips higher as the falling crude oil prices weighed on the commodity-sensitive loonie. After fluctuating near the 1.3050 mark for the majority of the day on Monday, the pair edged lower in the last hour and was last seen trading at 1.3038, erasing 0.09% on a daily basis. 

Although the barrel of West Texas Intermediate is trading near $58.70 and posting losses for the sixth straight day, the bearish pressure on crude oil seems to have eased following last week's 6% drop.

Eyes on BoC publication

Moreover, investors may be booking their profits ahead of the Bank of Canada's (BoC) Business Outlook Survey, which could provide fresh insights regarding the BoC's policy outlook. Last week, BoC Governor Poloz said that investment could be stronger than they have believed earlier in the year and noted that a combination of healthy employment and wage growth was driving the fundamental demand.

On the other hand, the US Dollar Index is registering small daily gains after suffering small losses on Friday amid the disappointing Nonfarm Payrolls (NFP) report. At the moment, the index is up 0.1% on the day at 97.45.

Technical levels to watch for