USD/CAD finds resistance near 1.3080 for second straight day
- Disagreements over USMCA at Democratic debate weighs on CAD.
- WTI struggles to extend recovery, trades around $58 ahead of EIA data.
- US Dollar Index stays directionless below 97.50 for third straight day.
For the second straight day on Wednesday, the USD/CAD pair struggled to rise above the 1.3080 mark and has gone into a consolidation phase. As of writing, the pair was up 0.08% on the day at 1.3070.
Democrats split over USMCA
During the Democratic debate on Wednesday, candidates Elizabeth Warren and Bernie Sanders voiced their disagreements over President Trump's USMCA trade deal to weigh on the CAD. “We can do much better than a Trump-led trade deal,” Sanders said to raise concerns over democrats voting against the deal that is set to replace the NAFTA.
In the meantime, despite snapping a seven-day losing streak, the barrel of West Texas Intermediate struggled to extend its recovery on Wednesday and was last seen posting small losses near the $58 mark ahead of the US Energy Information Administration's (EIA) weekly crude oil stock report. On Tuesday, the American Petroleum Institue said crude oil inventories in the US increased by 1.1 million barrels in the week ending January 10th.
On the other hand, the US Dollar Index continues to have a difficult time making a decisive move in either direction on Wednesday to allow crude oil's performance and the USMCA headlines to drive the pair's action. Ahead of the Producer Price Index (PPI) data from the US, the US Dollar Index is flat on the day at 97.38.
Markets will also be paying close attention to the details of the phase-one US-China trade deal and a significant reaction in crude oil prices could impact the pair's movements in the second half of the day.
Technical levels to watch for