USD/CAD rebounds above 1.2800 on renewed USD strength
- USD/CAD reversed its direction after dropping to 1.2770 area.
- US Dollar Index preserves its bullish momentum ahead of US data.
- Rising crude oil prices limit USD/CAD's upside for the time being.
The USD/CAD pair dropped toward 1.2770 area in the early trading hours of the European session but reversed its direction with the greenback starting to gather strength. As of writing, the pair was up 0.2% on a daily basis at 1.2807.
Since the beginning of the week, the sharp upsurge witnessed in crude oil prices helps the commodity-related CAD stay resilient against its rivals. Boosted by declining crude oil inventories and renewed optimism for a steady recovery in global energy demand, the barrel of West Texas Intermediate (WTI) surged to its highest level in more than a year at $56.30 on Wednesday and retreated modestly before closing at $55.90. At the moment, the WTI is up 0.4% on the day at $56.15.
DXY rally remains intact
On the other hand, the heavy selling pressure surrounding the EUR is allowing the greenback to continue to find demand on Thursday. Ahead of the US Department of Labor's weekly Initial Jobless Claims data, the US Dollar Index (DXY) is up 0.3% on the day at 91.45.
Other data featured in the US economic calendar will include fourth-quarter Nonfarm Labor Productivity, Unit Labor Costs and December Factory orders.
There won't be any significant macroeconomic data releases featured in the Canadian economic docket on Thursday.
Technical levels to watch for