USD/CAD looks to post highest daily close in three weeks near 1.2640

• USD/CAD is posting strong daily gains on Tuesday.
• WTI is losing nearly 2% following Monday’s climb.
• US Dollar Index steadies around 93.30 following yield-inspired rally.

The USD/CAD pair rose to its highest level since March 10 at 1.2647 on Tuesday and seems to have gone into a consolidation phase around 1.2640.

Oil selloff weighs on CAD

The selling pressure surrounding crude oil and the unabated USD strength fueled USD/CAD’s daily rally.

With operations resuming on the Suez Canal, the barrel of West Texas Intermediate (WTI) turned south on Tuesday and was last seen losing nearly 2% on the day at $60.40. Later in the session, the American Petroleum Institue’s (API) Weekly Crude Oil Stock will be looked upon for fresh impetus.

On the other hand, supported by the rising US Treasury bond yields, the US Dollar Index reached its highest level in nearly five months at 93.35 and provided an additional boost to USD/CAD.

The data published by the Conference Board showed on Tuesday that the Consumer Confidence Index in March rose to a one-year high of 109.7 to beat the market expectation of 96.9 by a wide margin.

On Wednesday, January Gross Domestic Product (GDP) will be featured in the Canadian economic docket and investors expect the economy to grow by 0.5% following December’s expansion of 0.1%. Moreover,  the Automatic Data Processing (ADP) Research Institute will release the US private sector employment report for March.

Technical levels to watch for