USD/CAD extends rebound to fresh daily highs above 1.2730

• USD/CAD gained traction after breaking above 1.2700 on Thursday.
• US Dollar Index is posting strong daily gains, closes in on 90.00.
• Crude oil prices rise for the third straight day.

The USD/CAD pair stayed relatively quiet around 1.2680 during the Asian trading hours but turned north ahead of the American session. As of writing, the pair was up 0.43% on the day at 1.2731.

DXY preserves bullish momentum ahead of key US data

The broad-based USD strength on Thursday seems to be fueling USD/CAD's climb on Thursday. The 10-year US Treasury bond yield gained more than 8% on Wednesday as investors started to price in more government spending amid imminent Democratic majority in the US Senate. The US Dollar Index (DXY) capitalized on soaring bond yields and closed in the positive territory after slumping to a multi-year low of 89.20. At the moment, the DXY is up 0.42% at 89.90.

Later in the day, the US economic docket will feature the US Department of Labor's weekly Initial Jobless Claims data and the ISM's Services PMI report. International Merchandise Trade data from Canada will be released as well.

Meanwhile, crude oil prices continue to push higher for the third straight day on Thursday and helping the commodity-sensitive CAD limit its losses for the time being. On Wednesday, US Senate Democratic Leader Chuck Schumer said that their top priority will be sending $2,000 stimulus checks to Americans, which is seen as a factor that can boost the energy demand. The barrel of West Texas ıntermediate is currently trading at $50.65, rising 0.28% on a daily basis. 

Technical levels to watch for