USD/CAD advances to fresh weekly highs above 1.3040 on intense oil selloff

• WTI erases more than 4% on Wednesday as tensions in Middle East ease.
• US Dollar Index climbs to fresh 12-day highs above 97.22.
• US ADP Employment Change comes in at 202K in December to beat expectations.

The USD/CAD pair broke above the 1.3000 mark during the early trading hours of the American session and continued to push higher to touch its best level since December 31st at 1.3044. As of writing, the pair was up 0.22% on the day at 1.3032.

Falling crude oil prices seem to be weighing on the commodity-sensitive loonie on Wednesday. After spiking to its highest in more than eight months at $65.60 on reports of Iran attacking US military bases in Iraq, the barrel of West Texas Intermediate (WTI) made a sharp U-turn in the second half of the day after US President Trump's press conference.

Trump confirmed that no Americans were harmed in Iran's missile strikes and added: "Iran appears to be standing down, which is a good thing for all parties concerned and a very good thing for the world." At the moment, the WTI is trading near $60, erasing 4.15% on the day.

USD outperforms major rivals on Wednesday

On the other hand, recovering US Treasury bond yields and the upbeat ADP employment data from the US helped the greenback find demand and provided an additional boost to the pair. The US Dollar Index is now adding 0.3% at 97.26.

In its monthly report, the ADP revealed that employment in the private sector rose by 202,000 in December, compared with analysts' estimate for an increase of 160,000. In the meantime, the 10-year US Treasury bond yield, which lost more than 3% earlier in the day, capitalized on the positive sentiment and was last up 1.6% on the day. 

Technical levels to watch for