USD/CAD ignores rising oil prices, closes in on 1.3700

• USD/CAD extended its daily rally in the American session.
• WTI turned positive on the day above $87 on OPEC+ decision.
• DXY is up more than 1% on a daily basis after US data.

USD/CAD preserved its bullish momentum in the second half of the day and touched a daily high of 1.3696 before edging slightly lower. As of writing, the pair was up 1.2% on the day at 1.3670.

Crude oil prices rebound

Crude oil prices gained traction during the American trading hours and the barrel of West Texas Intermediate (WTI), which spent a large portion of the day in negative territory, climbed above $87. News confirming OPEC+ decision to lower the group's output by 2 million barrels per day provided a boost to WTI. Additionally, the EIA reported a larger-than-expected decline in the US' crude oil stocks in the week ending September 30.

The dollar strength, however, dominated USD/CAD's action after the upbeat US data. The US Dollar Index was last seen rising 1.2% on the day at 111.55.

The ADP announced that private sector employment increased by 208,000 in September, higher than analysts' estimate of 200,000. Additionally, the Employment component of the ISM's Services PMI survey rose to 53 from 50.2, revealing that employment in the service sector expanded at a stronger pace in September than it did in August.

Following these data, the probability of a 75 basis points rate hike in November climbed above 70%, suggesting that hawkish Fed bets are driving the market action.

On Friday, September jobs reports from the US and Canada will be watched closely by market participants.

Nonfarm Payrolls Preview: Five scenarios for trading King Dollar as markets plead for pain.

Technical levels to watch for