USD/CAD slumps to 1.2550 area, erases weekly gains
|- USD/CAD came under strong bearish pressure in the American session.
- WTI is trading above $70, rising nearly 6% on the day.
- US Dollar Index edges lower as US stocks extend rebound.
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.