• USD/CAD is already down more than 100 pips on Wednesday.
• The US Dollar Index stays deep in negative territory ahead of key US data.
• Falling crude oil prices don't seem to be impacting CAD's performance for the time being.

USD/CAD came under heavy bearish pressure on Wednesday and dropped to a fresh daily low of 1.3542 during the European trading hours. As of writing, the pair was down 0.85% on the day at 1.3555.

The broad-based US Dollar weakness on Wednesday forces USD/CAD to stay on the back foot. Following Tuesday's rally, the US Dollar Index is down more than 0.5% on a daily basis near 104.00. Improving risk mood, as reflected by the 0.5% gain in the S&P Futures, seems to be hurting the safe-haven US Dollar as investors await key macroeconomic data releases.

The ISM will publish the December Manufacturing PMI report. In addition to the headline PMI reading, investors will also pay close attention to the inflation component, the Prices Paid Index. Later in the day, the FOMC will release the minutes of the December policy meeting.

US Dec ISM Manufacturing PMI Preview: Encouraging sub-indices could temporarily boost US Dollar.

Meanwhile, crude oil prices are down sharply for the second straight day on Wednesday. After having lost nearly 4% on Tuesday, the barrel of West Texas Intermediate is already down nearly 3% on the day, trading slightly below $75. For the time being, however, the US Dollar's market valuation continues to drive the pair's action as the commodity-related Canadian Dollar doesn't seem to be paying attention to oil prices.

Technical levels to watch for