USD/CAD pares daily losses, trades above 1.2770 in early NA session

• USD/CAD is staging a rebound in the early American session.
• US Dollar Index edges higher ahead of Wall Street’s opening bell.
• WTI clings to strong daily gains above $48 ahead of API data.

The USD/CAD pair dropped to 1.2730 area during the European trading hours but reversed its direction in the last hour. As of writing, the pair was virtually unchanged on the day at 1.2774.

USD/CAD turns north on DXY recovery

A negative shift in market sentiment seems to be helping the greenback gather strength in the early American session. At the moment, the S&P 500 Futures were down 0.42% on the day and the US Dollar Index (DXY), which dropped to a daily low of 89.59, was posting small losses at 89.79.

Meanwhile, the data from Canada showed that prices for products manufactured in Canada, as measured by the Industrial Product Price Index (IPPI), fell 0.6% on a monthly basis in November and put additional weight on the CAD’s shoulders.

On the other hand, crude oil prices continue to push higher and help the commodity-related loonie limit its losses for the time being. Ahead of the American Petroleum Institue’s (API) Weekly Crude Oil Stock data, the barrel of West Texas Intermediate is up 1.76% on the day at $48.15.

Later in the session, the ISM will release its US Manufacturing PMI report for December. Moreover, investors will keep a close eye on early exit polls of the runoff election in Georgia, which will determine if Democrats will be able to gain the majority in the US senate.

Technical levels to watch for