USD/CAD slides to fresh daily lows near 1.2870 ahead of key data

• USD/CAD edges lower on USD weakness and oil rebound.
• WTI trades above $47 after falling for two straight days.
• Focus shifts to key data releases from the US and Canada.

The USD/CAD pair gained more than 100 pips in the first two days of the week but reversed its course on Wednesday with rising crude oil prices and the broad USD weakness ramping up the bearish pressure. As of writing, the pair was down 0.3% on the day at 1.2870.

WTI rebounds on Wednesday

Heightened coronavirus fears revived concerns over an unsteady recovery in global energy demand and weighed on crude oil prices at the start of the week. The barrel of West Texas Intermediate (WTI) lost nearly 5% and touched a nine-day low of $46.13 but turned north ahead f the US Energy Information Administration’s weekly oil market report. At the moment, the WTI is up 0.7% on the day at $47.10, helping the commodity-related loonie preserve its strength.

On the other hand, the upbeat market mood is making it difficult for the greenback to continue to find demand as a safe-haven. The US Dollar Index, which rose for three straight days, is currently losing 0.25% on the day at 90.42. Reflecting the risk-on environment, the S&P 500 futures are rising 0.3%.

Later in the session, the Personal Consumption Expenditures (PCE) Price Index, New Home Sales, Personal Income, Durable Goods Orders and the UoM Consumer Sentiment Index will be featured in the US economic docket. Moreover, Statistics Canada will release the October Gross Domestic Product data.

The market reaction, however, could remain short-lived as the trading action is expected to turn subdued ahead of the Christmas holiday.

Technical levels to watch for