USD/CAD: Well bid above 1.3050 as WTI stays under $42, US dollar refreshes weekly high

USD/CAD extends the early-Asian recovery from 1.3037 to 1.3072, up 0.21% on a day, ahead of Thursday’s European session. The Loonie pair’s latest gains could be attributed to the WTI losses and the US dollar’s sustained run-up. However, traders await the key US and Canadian for fresh impetus.

WTI marked the biggest losses in 10-weeks as Iraq teased exceptions from the OPEC+ production cut on Wednesday before taking a U-turn afterward. The energy benchmark dropped more than $1.5 to sub-$42.00 while also ignoring the upbeat weekly inventory data from the US Energy Information Administration (EIA).

The US dollar index (DXY), on the other hand, refreshed weekly high to near 93.00 even as ADP Employment Change dropped below forecast. The greenback gauge currently gains 0.30% while rising for the third day after visiting the lowest levels in 28 months.

Even so, the Loonie pair marked losses the previous day as Canadian Labor Productivity for the second quarter (Q2) rose past-1.2% forecast and 4.5% prior to 9.8%. A lack of activity in the equities near the record high also weighed on the quote.

Looking forward, anticipated weakness in Canada’s International Merchandise Trade should be matched with better than forecast prints of the US ISM Services PMI to keep the pair bulls happy. Though, cautious sentiment ahead of the key employment data for August may continue troubling the traders.

Technical analysis

Unless breaking the late-August lows near 1.3135, buyers are less likely to be convinced.