USD/CAD pares early losses, advances toward 1.2550 as oil prices turn south
- USD/CAD staged a modest rebound after declining toward 1.2500.
- WTI trades below $70 ahead of EIA Crude Oil Stocks Change data.
- US Dollar Index stays calm near 92.00 as focus shifts to US data.
The USD/CAD pair closed the last three trading days in the positive territory as falling crude oil prices made it difficult for the commodity-related CAD to find demand. Although the pair edged lower toward 1.2500 on Wednesday, it regained its traction and was last seen posting small daily gains at 1.2544.
Eyes on high-tier US data
Renewed concerns over the coronavirus Delta variant hurting the energy demand recovery in China continue to weigh on oil prices. As of writing, the barrel of West Texas Intermediate (WTI), which lost nearly 5% in the first two days of the week, was down 0.6% on the day at $69.75. Later in the session, June Building Permits will be the only data featured in the Canadian economic docket but it's not expected to receive a significant market reaction.
On the other hand, the US Dollar Index extends its sideways grind around 92.00 ahead of key data releases, allowing the CAD's valuation to impact USD/CAD's movements.
The IHS Markit and the ISM both will be publishing the Services PMI surveys for July later in the day. The ADP's private sector employment report will be looked upon for fresh impetus as well. Investors expect the ADP Employment Change to rise modestly to 695K in July from 692 in June. A stronger-than-expected reading could provide a boost to the USD and help USD/CAD gather additional bullish momentum.
Technical levels to watch for