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  • WTI rises to fresh weekly highs above $70 following the EIA’s weekly stock report.
  • Loonie gathers strength against its rivals on the back of oil rally.
  • US Dollar Index stays in range near mid-94s.

The USD/CAD pair spiked to a daily high at 1.3015 in the American trading hours as the loonie weakened after reports claiming that the U.S. and Canada wouldn’t be able to reach a NAFTA deal this week. However, the pair lost its traction in the last hour and turned negative on the day after crude oil surged higher on the back of the weekly EIA report, which showed that crude oil stocks in the U.S. decreased 2.1 million barrels.   As of writing, the pair was down 0.2% on the dat at 1.2950.

Boosted by the EIA data, the barrel of West Texas Intermediate rose to its highest level in a week at $71.01 and was last seen trading at $70.95, adding 1.8% on the day. In addition to falling crude oil stocks, the report also revealed that the gasoline output in the U.S. decreased to an average of 10.3 million barrels per day.

Meanwhile, the US Dollar Index is struggling to make a decisive move in either direction on Wednesday to allow the pair’s price action  to  be dominated by the loonie. At the moment, the DXY was virtually unchanged on the dat  at 94.58.

There won’t be any macroeconomic data releases in the remainder of the day and tomorrow’s macroeconomic calendar will feature the ADP employment change from Canada and weekly jobless claims and existing home sales from the United States.

Technical levels to consider

The first critical support for the pair aligns at 1.2925 (200-DMA) ahead of 1.2885 (Aug. 28 low) and 1.2820 (May 31 low). On the upside, resistances could be seen at 1.3000 (psychological level), 1.3055 (50-DMA/20-DMA), and 1.3090 (100-DMA).