USD/CAD edges up to session tops on tumbling oil prices, upbeat ADP report

• USD/CAD reversed an early dip amid a sharp fall in crude oil prices.
• Resurgent USD demand remained supportive of the positive move.
• The US ADP report showed private-sector employment rose by 202K.

The USD/CAD pair climbed further beyond the key 1.30 psychological mark and refreshed daily tops during the early North-American session.

A combination of factors helped the pair to reverse an early dip to an intraday low level of 1.2976 and turn higher for the second consecutive session on Wednesday.

Sliding oil prices/stronger USD supportive

As investors looked past the latest escalation of geopolitical tensions in the Middle East, a sharp fall in oil prices weighed heavily on the commodity-linked currency – loonie.

In fact, oil prices have now lost over 6% from near eight-month tops set earlier this Wednesday following the news that Iran's retaliatory strike on the US-led forces in Iraq.

This coupled with a goodish pickup in the US dollar demand, supported by a turnaround in the US Treasury bond yields, further collaborated to the pair's intraday move up.

The bid tone surrounding the greenback remained unabated after the latest US ADP report showed that private-sector employers added 202K new jobs in December vs. 160K expected.

With Wednesday's key US macro data out of the way, market participants now look forward to the US President Donald Trump's speech about Iran for some meaningful directional impetus.

Technical levels to watch