USD/CAD pares early gains, trades around 1.3280 ahead of US, Canada data

• WTI posts strong recovery gains ahead of weekly EIA data.
• US Dollar Index clings to modest daily gains above 98.
• Coming up: Trade Balance from Canada, ADP Employment Change and Non-Manufacturing PMI data from US.

The USD/CAD pair advanced to a daily high of 1.3300 earlier in the day but reversed its direction with the crude oil recovery helping the commodity-sensitive CAD stay resilient against the USD. As of writing, the pair was trading at 1.3280, still up 0.05% on a daily basis.

The decisive rally witnessed on the US Treasury bond yields on Tuesday and Wednesday seems to be helping the greenback gather strength with the US Dollar Index climbing above the 98 handle. Later in the day, the ADP Employment Change, Markit Services PMI and the ISM Non-Manufacturing PMI data from the US will be looked upon for fresh impetus. Additionally, Statistics Canada will release the Trade Balance figures.

Eyes on OPEC

In the meantime, reports suggesting that Russia will cooperate with the OPEC allowed crude oil prices to gain traction. The barrel of West Texas Intermediate, which touched a fresh daily high of $51.17, was last seen trading at $50.75, up 2.7% on the day.

The Energy Information Administration (EIA) will release its weekly crude oil market report later in the day. More importantly, OPEC’s Joint Technical Committee (JTC) is expected to announce its recommendation on oil output cuts with an aim to negate the impact of the coronavirus outbreak on the global demand. 

Technical levels to watch for