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  • Higher equity and crude oil prices boost the loonie.
  • USD/CAD extends correction from weekly highs under 1.2550.

The USD/CAD is trading at daily lows near 1.2540. It dropped further during the American session on the back of an improvement in risk sentiment and higher crude oil prices.

Earlier on Wednesday, the USD/CAD peaked at 1.2608, the highest level since March 11. It then started to correct lower and accelerated on US hours, breaking under 1.2550.

In Wall Street, the Dow Jones gains more than 1% and the S&P 500 0.62%, while the Nasdaq is still in negative territory, falling 0.30%. The WTI soars 5%, with the barrel above $60.00. Speculations that OPEC+ will keep output steady at the April meeting and the Suez Canal blockade are keeping oil on demand.

The pair is about to post the first daily loss after rising during four consecutive days. From a technical perspective, USD/CAD still holds a bullish tone but the momentum eased. The next support is seen at 1.2530, and a consolidation below would point to some weakness to the upside. A recovery back above 1.2580, would expose 1.2600.

Technical levels