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  • USD/CAD is fluctuating in a tight range on Wednesday.
  • WTI consolidates Tuesday’s gains, stays quiet near $40.
  • Market action is likely to remain subdued in the remainder of the day.

Following Tuesday’s modest recovery, the USD/CAD pair is moving in a narrow band on Wednesday and having a difficult time determining its next short-term direction. As of writing, the pair was virtually unchanged on a daily basis at 1.3140.

DXY consolidates Tuesday’s gains near mid-93s

In the absence of significant fundamental drivers, the US Dollar Index, which rose more than 0.5% on Tuesday, is moving sideways near 93.50. The only data featured in the US economic docket will be the Producer Price Index (PPI) and is unlikely to trigger a meaningful market reaction.

On the other hand, after gaining nearly 2% and helping the commodity-sensitive CAD limit its losses against its losses, the barrel of West Texas Intermediate is trading with modest losses near $40. Later in the day, the American Petroleum Institue’s (API) Weekly Crude Oil Stock data will be looked upon for fresh impetus.

Meanwhile, the S&P 500 futures are virtually unchanged on the day at 3,502, suggesting that Wall Street is likely to open the day little changed. Market participants will keep a close eye on fresh developments surrounding US stimulus talks and a positive shift in market sentiment could cause the USD to lose interest and weigh on USD/CAD.

Technical levels to watch for