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  • DXY recovers daily losses on latest Turkey headlines.
  • WTI looks to settle with modest gains below mid-$65s.

The USD/CAD pair advanced to a fresh daily high at 1.3175 as the greenback gained traction after the U.S. Treasury Secretary Steven Mnuchin in a White House cabinet meeting said that they were planning to impose new sanctions against Turkey. The US Dollar Index, which touched a daily low at 96.30 earlier today, rose above the 96.70 area to turn positive on the day. As of writing, the USD/CAD pair was trading at 1.3169, adding 0.21% on the day.

In the meantime, crude oil’s inability to make a decisive recovery on Thursday helps the pair preserve its bullish momentum by keeping the investors away from  the commodity-sensitive loonie. At the moment, the barrel of West Texas Intermediate is up 40 cents on the day at $65.30.

Today’s data from Canada showed that manufacturing sales increased by 1.1% in June to beat the market expectation of 0.9% and the ADP report revealed an 11.6K increase in employment. However, investors essentially ignored today’s numbers as they remain focused on Friday’s monthly inflation report.  

“For the core, we expect to see the gap between exclusion-based core indexes (CPIX and CPIXFE) and BoC core measures to narrow with this report, with the latter staying near 2.0% on average and the former moving marginally higher. Looking ahead, July CPI likely marks the peak this year, as we continue to expect a moderation toward 2.0% through year-end,” TD Securities analysts wrote in a recently published report.

Technical levels to consider

With a break above 1.3200 (psychological level) the pair could extend its gains toward 1.3285 (Jul. 19 high) and 1.3385 (Jun. 27 high). On the downside, supports align at 1.3135 (50-DMA), 1.3105 (Aug. 13 low) and 1.3050/55 (Aug. 15 low/20-DMA).