After trading in a relatively tight range around 1.2700 during the first half of the day, the USD/CAD pair came under strong bearish pressure and dropped all the way to 1.2523 before going into a consolidation phase. As of writing, the pair was down nearly 1%, or 120 pips, on the day at 1.2555.
WTI reclaims $70 on Wednesday
The sharp rebound witnessed in crude oil prices provided a boost to the CAD during the American trading hours. Although the US Energy Information Administration's (EIA) weekly report showed that crude oil stocks increased by 2.1 million barrels, the barrel of West Texas Intermediate (WTI) preserved its bullish momentum supported by risk flows. At the moment, WTI is up 5.9% on a daily basis at $70.30.
On the other hand, the renewed USD weakness put additional weight on USD/CAD's shoulders. With Wall Street's main indexes opening in the positive territory, the greenback lost its strength and the US Dollar Index (DXY) turned negative on the day. Currently, the DXY is down 0.2% and remains on track to snap a four-day winning streak.
There won't be any high-tier data releases from Canada on Thursday. The US Department of Labor's weekly Initial Jobless Claims report will be featured in the US economic docket. Nevertheless, the risk perception and its impact on crude oil prices are likely to remain the primary driver of USD/CAD's movements in the near term.
Technical levels to watch for
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.