USD/CAD erases daily gains as crude oil recovers

Fueled by the rising crude oil prices, the loonie started to gain strength against the USD during the NA session, pulling the USD/CAD pair back below the 1.36 handle. As of writing, the pair was trading at 1.3575, still up 0.54% on the day.

Earlier during the day, the pair surged to a new 14-month high on weak crude oil prices and a new tariff announcement from the U.S. According to a Reuters report, U.S. Commerce Secretary Wilbur Ross announced that the United States will impose preliminary anti-subsidy duties averaging 20% percent on imports of the softwood lumber from Canada.

After dropping to $49 area on Tuesday, the barrel of West Texas Intermediate started to correct its losses after the Thomson Reuters trade flows data revealed that Venezuelan crude oil sales to the United States declined in March for the third month in a row this year to 651,710 barrels per day, suggesting that the country's output continues to be hurt by recent mass protests and heightened political tensions. At the moment the barrel of WTI is adding 0.9% at $49.70.

Technical outlook

1.3626 (daily high) could be seen as the first technical resistance for the pair ahead of 1.3700 (psychological level) and 1.3735 (2016, Feb. 25 high). To the downside, supports are located at 1.3600 (psychological level/Dec. 28 high), 1.3525 (Apr. 21 high) and 1.3410 (Monday's low).

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