USD/CAD drops below 1.3300 as WTI continues to push higher

• USD/CAD turned south after climbing toward 1.3350 on Wednesday.
• WTI gains more than 1% to trade above $42 ahead of EIA data.
• US Dollar Index turns red ahead of US CPI data.

The broad-based USD strength lifted the USD/CAD pair to a fresh daily high of 1.3348 in the early European trading hours. However, with rising crude oil prices helping the commodity-related loonie gather strength against its rivals, the pair turned south and was last seen losing 0.12% on a daily basis at 1.3285.

DXY goes into consolidation ahead of American session

Supported by the sharp upsurge witnessed in the US Treasury bond yields, the US Dollar Index closed the third straight day in the positive territory on Tuesday. Although the index climbed to its highest level in more than a week at 93.91 on Wednesday, it erased its daily gains and was last seen posting small losses at 93.60. Meanwhile, the 10-year US Treasury bond yield is up more than 4%, suggesting that the greenback is likely to remain resilient against its peers.

On the other hand, crude oil prices capitalized on the upbeat market mood and the barrel of West Texas Intermediate (WTI) advanced beyond $42. Ahead of the US Energy Information Administration’s weekly Crude Oil Stocks Change data and the OPEC’s monthly report, the WTI is up 1.4% on the day at $42.18.

Later in the session, the US Bureau of Labor Statistics will release the Consumer Price Index (CPI) data. Experts expect the CPI to rise to 0.8% on a yearly basis in July and a higher-than-expected reading could give the USD an additional boost in the second half of the day.

Technical levels to watch for