USD/CAD Extends Downslide to a Fresh 5-Week Low
As WTI crude oil prices are sustaining strength above $50.00/barrel psychological mark, the USD/CAD pair extended its slide for fourth consecutive day to currently trade at a fresh 5-week low level of 1.2715.
In the aftermath of dismal May employment figures, the US Dollar continues to witness selling pressure on every attempt of recovery from lower level. Moreover, the Canadian Dollar is also benefiting from the upbeat sentiment surrounding crude oil prices, which got a further boost on Tuesday after API reported US commercial crude inventories fell by 3.6 million barrels last week.
With a high degree of correlation with crude oil prices, traders now turn their attention to the official EIA report on weekly US crude inventories, slated for release later during NY session, preceded by the release of Canadian Housing Starts and Building Permits for the month of April, for near-term direction for the USD/CAD pair.
Technical levels to watch
Weakness below 1.2700 round figure mark is likely to get extended towards 1.2650-45 horizontal support. With daily RSI reading approaching near-term oversold conditions, any further downslide below 1.2650-45 might be limited and is likely to take support near 1.2600 round figure mark.
Meanwhile on the upside, 1.2760-65 area (nearing day's peak) now seems to have emerged as immediate resistance for the pair. A sustained recovery back above 1.2760-65 resistance seems to assist the pair to extend its recovery beyond 1.2800 handle towards testing 1.2850 resistance.
