USD/CAD extends daily rally, trades above mid-14200s

• US Dollar Index consolidates gains above 99.50 ahead of key data.
• Crude oil rebounds modestly on Wednesday, WTI closes in on $51.
• Manufacturing PMI data from US and Canada will be released later in the day.

The USD/CAD pair fluctuated in a relatively wide range on Tuesday amid month-end flows and closed the day in the negative territory. With the greenback gathering strength as a safe-haven in the risk-averse market atmosphere, the pair gained traction and climbed to a daily high of 1.4669. As of writing, the pair was up 1.4% on the day at 1.4258.

Although a Kremlin spokesman noted that Russia was not holding talks with Saudi Arabia to balance the oil market at the moment, he added that negotiations could be set up in a timely manner if necessary. After erasing more than 50% in March, the barrel of West Texas Intermediate is posting recovery gains on Wednesday to help the CAD limits its losses for the time being. At the moment, the WTI is up 2.63% on the day at $20.60.

Meanwhile, the US Dollar Index easily erased Wednesday's losses and was last seen adding 0.75% at 99.70 ahead of the key macroeconomic data releases.

Eyes on US and Canada data

In the early trading hours of the American session, the ADP will release its Employment Change data for the private sector. More importantly, the IHS Markit's final reading of March Manufacturing PMI data for the US and the ISM's Manufacturing PMI will be watched closely by the market participants. The Canadian Economic docket will feature the Markit Manufacturing PMI reading as well. 

Previewing the PMI data from US, “economic data from March and April will be historically grim," said FXStreet analyst Joseph Trevisani. "While the markets seem increasingly convinced that the recovery will be swift and dramatic, business investment and sector recovery is likely to await more concrete information.”

Technical levels to watch for