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  • USD/CAD erases its losses after dropping toward 1.2700.
  • WTI stages a technical correction after climbing above $58.
  • US Dollar Index continues to push lower on Tuesday.

The USD/CAD pair dropped to its lowest level in nearly two weeks at 1.2710 on Tuesday but reversed its direction ahead of the American session. As of writing, the pair was virtually unchanged on a daily basis at 1.2739.

Oil rally loses steam

The broad-based selling pressure surrounding the greenback caused USD/CAD to push lower during the first half of the day. The US Dollar Index, which closed below 91.00 on Monday, dropped to 90.50 during the European trading hours and was last seen losing 0.35% on the day at 90.62. The poor performance of US Treasury bond yields seems to be weighing on the greenback on Tuesday.

The data from the US showed that the NFIB Business Optimism Index in January declined to 95 and missed the market expectation of 98.7. Nevertheless, the market reaction to this report was largely muted. Later in the session, the JOLTS Job Openings data from the US will be looked upon for fresh impetus.

Meanwhile, after rising to its highest level in more than a year at $58.60, the barrel of West Texas Intermediate (WTI) seems to have gone into a consolidation phase. Ahead of the API’s Weekly Crude Oil Stock report, the WTI is down 0.55% on the day at $57.75, making it difficult for the commodity-related CAD to stay resilient against its American counterpart.

Technical levels to watch for