USD/CAD Drops to Session Low as Oil Recovery Gains Momentum
The Canadian Dollar gained traction during early NY trading session, dragging the USD/CAD pair to session low of 1.2920, as crude oil prices recovery to move back above $44.00/barrel mark.
The American Petroleum Institute (API), an industry trade group, will releases it report on US crude oil inventories on Tuesday while EIA is scheduled to release its weekly inventories data on Wednesday. Renewed worries over supply glut have been the key reason that has capped crude oil prices. This week's data could further add to the ongoing worries, which could again drag oil prices lower.
As the correlation between the USD/CAD pair and crude oil prices remains high, any signs of renewed weakness in crude oil prices might be enough to lift the pair back towards 1.3000 important handle.
Technical levels to watch
From current levels, weakness below 1.2900 round figure mark is likely to get extended towards 1.2850-45 resistance break-point turned support. A follow through selling pressure could drag the pair back towards retesting an important support near 1.2820-1.2800 area.
Alternatively, a renewed buying interest could lift the pair back towards 1.3000 important psychological mark, which if conquered decisively seems to assist the pair to extend its near-term recovery trend towards its next major resistance near 1.3135-40 area (April daily closing high resistance), with 1.3100 round figure mark region acting as intermediate resistance.