USD/CAD advances to fresh 2020 highs above 1.3330 on crude oil selloff

• WTI trades below $49 despite smaller-than-expected build in US crude stocks.
• US Dollar Index remains on track to snap three-day losing streak.
• Coming up on Thursday: GDP and Durable Goods Orders data from US.

The USD/CAD pair struggled to make a decisive break above the 1.3300 handle for the majority of the day but gathered momentum during the American session and touched its highest level since October at 1.3333. As of writing, the pair was trading a couple of pips below that level, adding 0.45% on a daily basis.

The heavy selling pressure surrounding crude oil seems to be weighing on the commodity-sensitive CAD on Wednesday. Although the weekly EIA report showed a smaller-than-expected build in the crude oil stocks in the US, the barrel of West Texas Intermediate (WTI) failed to recover its losses. As of writing, the WTI was down 2.75% on the day at $48.70.

Oil Price Analysis: WTI trades at its lowest since January 2019.

USD recover ahead of GDP data

On the other hand, the US Dollar Index (DXY) rose above the 99 mark and now looks to close the day in the positive territory after erasing nearly 1% since last Friday. However, the DXY's rebound seems to be a technical response to the sharp drop and the greenback remains fragile with the 10-year US Treasury bond yield staying dangerously close to the all-time lows that it set earlier.

On Thursday, the fourth-quarter GDP and Durable Goods Orders data from the US will be looked upon for fresh impetus. The only data featured in the Canadian economic docket will be the Current Account Balance. 

Technical levels to watch for

The pair could face the initial resistance at 1.3350 (October 3 high) ahead of 1.3380 (September 3 high) and 1.3400 (psychological level). On the downside, 1.3300 (psychological level) aligns as the initial support before 1.3270 (daily low) and 1.3225 (February 24 low).