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  • USD/CAD is struggling to find direction on Wednesday.
  • WTI is consolidating its gains near $55 following Tuesday’s rally.
  • US Dollar Index holds above 91.00 ahead of key data releases.

Despite the broad-based USD strength, the USD/CAD pair closed in the negative territory on Tuesday as surging crude oil prices allowed CAD to outperform its rivals. Ahead of macroeconomic data releases from the US, the pair is consolidating its losses and was last seen posting small daily gains at 1.2793.

Oil rally loses steam ahead of EIA data

Supported by heightened optimism for a steady recovery in energy demand and declining inventories, crude oil prices started the week on a firm footing. The barrel of West Texas Intermediate (WTI) gained more than 5% in the first two days of the week and touched its highest level in a year at $55.22.

Ahead of the US Energy Information Administration’s (EIA) weekly Crude Oil Stocks Change data, the WTI is trading flat on the day near $55, keeping CAD’s upside potential limited for the time being. 

On the other hand, the US Dollar Index is staying relatively calm near 91.20 as investors await ADP Employment Change and the ISM Services PMI data. Additionally, several FOMC policymakers, including Dallas Fed President Robert Kaplan and Philadelphia Fed President Patrick Harker, will be delivering speeches later in the day.

There won’t be any significant macroeconomic data releases featured in the Canadian economic docket.

Technical levels to watch for