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.

Eren Sengezer FXStreet

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

USD/CAD

Overview
Today last price	1.2557
Today Daily Change	-0.0124
Today Daily Change %	-0.98
Today daily open	1.2681

Trends
Daily SMA20	1.2459
Daily SMA50	1.2267
Daily SMA100	1.2375
Daily SMA200	1.2623

Levels
Previous Daily High	1.2787
Previous Daily Low	1.2675
Previous Weekly High	1.2621
Previous Weekly Low	1.2427
Previous Monthly High	1.2487
Previous Monthly Low	1.2007
Daily Fibonacci 38.2%	1.2718
Daily Fibonacci 61.8%	1.2744
Daily Pivot Point S1	1.2642
Daily Pivot Point S2	1.2602
Daily Pivot Point S3	1.253
Daily Pivot Point R1	1.2754
Daily Pivot Point R2	1.2826
Daily Pivot Point R3	1.2866

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

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