USD/CAD stays close to 1.32 as crude oil sell-off continues

• WTI suffers losses for the third straight day on Wednesday.
• Ivey PMI from Canada disappoints.
• US Dollar Index sits comfortably above the 96 handle.

The USD/CAD pair rose above the 1.32 mark for the first time since January 30 as the commodity-sensitive loonie continued to weaken amid the ongoing crude oil sell-off. As of writing, the pair was trading at 1.3185, adding 0.45% on a daily basis.

Since starting the week above $55 and reaching a multi-month high of $55.72 on Monday, the barrel of West Texas Intermediate lost its traction and now remains on track to settle in the negative territory for the third straight day. Although the recently published EIA report from the U.S. showed a slightly smaller-than-expected buildup in crude oil stocks, the WTI struggled to make a decisive recovery and was last down 0.6% on the day at $53.35.

Meanwhile, the Ivey PMI from Canada came in at 54.7 in January (seasonally adjusted) to miss the market expectation of 56 and further weighed on the CAD. The next significant for the CAD will be Friday's labour market report.

On the other hand, the US Dollar Index extended its bullish rally that started following last week's Fed-inspired drop and is now at its highest level in two weeks above 96.20. Despite a lack of fundamental catalysts that is seemingly driving the DXY's upsurge, the greenback continues to find demand with investors staying away from major European currencies. At the moment, the DXY is up 0.18% on the day at 96.25.

Technical levels to consider

The pair could face the first resistance at 1.3200/1.3210 (psychological level/daily high) ahead of 1.3280 (Jan. 30 high) and 1.3360 (50-DMA). On the downside, supports are located at 1.3125 (daily low), 1.3070 (Feb. 2 low) and 1.3000 (psychological level).