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  • WTI erases a small portion of daily recovery gains, drops below $52.
  • Commodity-sensitive loonie stays resilient against the buck.
  • US Dollar Index looks to close the day above 97.

After coming under pressure amid the rising crude oil prices and dropping below the 1.32 mark earlier in the day, the USD/CAD pair recovered its losses in the second half of the day and rose to a fresh daily high of 1.3248. With the markets calming down in the last couple of hours, the pair started to  move sideways near the 1.3240, where it was up 0.05% on the day.

The barrel of West Texas Intermediate, which lost more than $6 last week, staged a technical correction today to boost the demand for the commodity-related loonie. Following the recovery to $52.22, the WTI pulled back a little and was last seen up 2.7% on the day at $51.70.

On the other hand, despite the mixed macroeconomic data releases from the United States, the US Dollar Index gained traction during the NA session and rose above the 97 mark supported by a decisive rise seen in the T-bond yields. At the moment, the US Dollar Index is up 0.12% on the day at 97.05.

Later this week, GDP data from both Canada and the United States will be watched closely by the market participants. Furthermore, headlines from G20 are likely to cause sharp fluctuations. Previewing this week’s events, “Trump, Trudeau and Lopez Obrador are expected to sign the USMCA in Argentina on the sidelines of the G20. A meeting between President Trump and President Xi will also be closely watched, especially by those at the BoC who have flagged US/China trade tensions as one of the key risks to the outlook,” note TD Securities analysts.

Technical levels to consider

On the downside, the pair could face the first technical support at 1.3200 (psychological level) ahead of 1.3130 (Nov. 16 low) and 1.3085 (50-DMA). On the other hand, resistances are located at 1.3260 (Nov. 14 high), 1.3320 (Nov. 20 high) and 1.3385 (Jun. 27 high).