USD/CAD advances to fresh daily highs above 1.3580

• USD/CAD is rising modestly for second straight day on Wednesday.
• USD gathers strength as market sentiment turns sour.
• WTI trades below $40 after snapping three-day winning streak. 

The USD/CAD pair posted small daily gains on Tuesday and continued to edge higher on Wednesday. After touching a fresh session high of 1.3584, the pair retreated slightly and was last seen trading at 1.3565, where it was up 0.15% on the day.

DXY rebounds on Wednesday

The souring market sentiment on concerns over reports suggesting that the US is planning to impose new tariffs on more than $3 billion worth of UK and EU imports helps the greenback find demand. At the moment, the S&P 500 futures are down 0.92% on the day, suggesting that Wall Street could open deep in the negative territory.

The US Dollar Index (DXY), which closed the last two days in the red and lost nearly 1%, is now gaining 0.1% on the day at 96.78.

In the second half of the day, the Housing Price Index will be the only data featured in the US economic docket. Chicago Fed President Charles Evans and St. Louis Fed President James Bullard are scheduled to deliver speeches as well.

Meanwhile, the risk-off environment seems to be weighing on crude oil prices on Tuesday. With the barrel of West Texas Intermediate (WTI) losing 0.65% and trading near $39.70, the commodity-sensitive loonie is having a tough time staying resilient against its major rivals. The US Energy Information Administration’s (EIA) weekly Crude Oil Stocks Change could impact the WTI’s action during the American trading hours. 

Technical levels to watch for