- US Dollar Index continues to edge higher on Thursday.
- WTI gains more than 10%, trades near $16.
- Coming up: Weekly Jobless Claims and Markit PMI data from US.
The USD/CAD pair failed to hold above the 1.4200 handle on Wednesday and closed the day in the negative territory at 1.4161 as recovering crude oil prices helped the CAD stay strong against its American counterpart. Although crude oil prices continue to rise on Thursday, the broad-based USD strength keeps the pair’s downside limited. As of writing, the pair was down 0.08% on a daily basis at 1.4148.
Following the unprecedented decline witnessed at the start of the week, the barrel of West Texas Intermediate gained nearly 10% on Wednesday and preserved its bullish momentum. At the moment, the WTI is up 11% on the day at $15.90. However, the fact that the dismal demand outlook amid coronavirus-related lockdowns hasn’t changed suggests that the rebound is technical.
Eyes on US data
On the other hand, the selling pressure surrounding the euro is helping the USD find demand on Thursday. With the US Dollar Index posting daily gains for the fourth straight day and advancing above the 100.50 mark, the pair stays directionless in its range.
In the second half of the day, the weekly Initial Jobless Claims and the Markit Manufacturing and Services PMI from the US will be looked upon for fresh impetus.
Previewing the data, “Markit’s purchasing managers indexes (PMI) are predicted to drop to 37 for manufacturing and 32.5 for services in April,” said NDDFX analyst Joseph Trevisani. “Two things are certain. First is that April’s statistics will not be the bottom of the abyss. Second is that until that bottom is in sight, the dollar’s safe-haven lure will not dissipate.”
Technical levels to watch for