USD/CAD pulls away from daily highs, holds in positive territory above 1.2600
- USD/CAD touched a daily high of 1.2648 ahead of the American session.
- US Dollar Index extends rebound into second straight day on Wednesday.
- Private sector employment in US rose more than expected in September.
The USD/CAD pair closed the previous four trading days in the negative territory but managed to stage a rebound on Wednesday. After reaching a daily high of 1.2648, however, the pair lost its bullish momentum and erased a portion of its daily gains. As of writing, USD/CAD was up 0.3% on the day at 1.2617.
DXY clings to gains above 94.00
The risk-averse market environment, as reflected by the sharp decline witnessed in major European equity indexes, seems to be helping the USD find demand on Wednesday. The US Dollar Index (DXY), which posted modest gains on Tuesday, climbed to a fresh weekly high of 94.44 before retreating modestly. Currently, the DXY was rising 0.35% at 94.30.
The data published by the Automatic Data Processing (ADP) Research revealed on Wednesday that the private sector employment in the US rose by 568,000 in September, compared to analysts' estimate of 428,000. Nevertheless, the market mood remains sour despite the upbeat data and the S&P Futures were last seen losing 0.77%.
On the other hand, the barrel of West Texas Intermediate (WTI) is losing more than 1% on Wednesday, making it difficult for the commodity-related loonie to show resilience against its rivals. Later in the session, the US Energy Information Administration's (EIA) weekly Crude Oil Stocks Change report will be looked upon for fresh impetus.
In the meantime, the risk perception is likely to continue to drive the financial markets amid a lack of high-tier data releases in the remainder of the day.
Technical levels to watch for