USD/CAD losing sight of 1.29 handle as Oil extends rally

The USD/CAD pair extends its retreat from five-day tops for the second straight session, as the Loonie continues to benefit from the oil-price rally.

USD/CAD finds support ahead of Friday’s low

Currently, the USD/CAD pair drops -0.29% to 1.2858, attempting recovery from session lows reached at 1.2845 in mid-Asia. The Canadian dollar continue to strengthen versus its American counterpart as we progress towards the early European trades, keeping USD/CAD depressed near the mid-point of 1.28 handle.

The Loonie is seen extending higher largely on the back of the recent strength in the oil prices, backed by supply outages and bullish forecasts from Goldman Sachs. Meanwhile, WTI climbs 0.94% above $ 48, while Brent jumps +0.51% to $ 49.20.

Moreover, broad based US dollar correction from two-week tops also collaborated to the downbeat sentiment around USD/CAD. Meanwhile, the major will continue to track the broader market sentiment ahead of the US dataflow and Canadian manufacturing sales print.

USD/CAD Technical Levels

To the upside, the next resistances are seen near 1.2886/1.2898 (May 4 High/ 50-DMA) and 1.2911 (daily R1). To the downside, immediate support might be located at 1.2830/26 (May 13 & 11 Low) and below that 1.2775/50 (Daily S3/ psychological levels).