USD/CAD turns negative below mid-1.27s on WTI rally

• Crude oil gains traction on OPEC/non-OPEC output cut deal extension talks. 
• The USD/CAD pair loses more than 50 pips in the session.
• Ivey PMI data shows healthy business activity in Canada.

The USD/CAD pair, which advanced toward the 1.28 handle in the early NA session, lost its momentum and reversed course to turn negative on the day. As of writing, the pair was trading losing 0.27% at 1.2730.

Crude oil drives the price action on Monday

On Monday, Nigerian oil minister Kachikwu said that Nigeria would support an extension of a deal between OPEC, Russia and other non-members to cut oil supply until the end of 2018 as long as the right terms were on the table. Kachikwu further added that there was a consensus to extend the deal and the duration was up to discussion. Boosted by these comments, the barrel of West Texas Intermediate rallied to its highest level since early 2015 at $57.50, allowing the commodity-sensitive loonie to gather strength against its rivals. The barrel of WTI was last seen trading at $57.20, gaining nearly 3% on the day. 

• WTI hits fresh two-year highs at $57.51
• Canada: Ivey PMI eases to 63.5 from 68.6 in October

On the other hand, after struggling to stretch its upside above the 95 handle, the US Dollar Index came under a modest pressure in the session and erased its daily gains. At the moment, the index is losing 0.18% at 94.66. 

With no significant macroeconomic data scheduled to be released on Tuesday, crude oil prices are likely to impact the pair's price action. Later in the month, OPEC is going to meet in Vienna to discuss the extension of the deal and headlines on this subject could continue to boost oil prices.

Technical outlook

FXStreet's technical confluence indicator suggests that the pair could face the first technical resistance at 1.2800 (10-DMA/Fibo 38.2% of 1-week range) ahead of 1.2915 (Oct. 27 high) and 1.3000 (psychological level). On the downside, supports could be seen at 1.2700 (psychological level/20-DMA), 1.2620 (Oct. 24 low) and 1.2525 (100-DMA).