USD/CAD continues to inch higher as oil slides further

Continuous slide in crude oil prices is weighing on the Canadian Dollar, with the USD/CAD pair moving back above 1.3150 to currently trade within striking distance of multi-week high level of 1.3185 tested on Friday.

Maintaining its high degree of correlation with crude oil prices, the pair remained well bid for fifth consecutive day as crude oil prices extend their slide to a fresh 11-week low on renewed worries of a global supply glut after Friday's report on US crude oil rig counts. 

Also on Friday, after an initial downward reaction the pair shrugged off upbeat Canadian data and extended it upward trajectory to provide its highest weekly close since March. 

Going forward, a slew of economic releases, including GDP data from the US and Canada on Friday preceded by the Federal Reserve monetary policy meeting on Wednesday, would be the next big triggers that would determine the pair's trajectory in the near-term.

Technical levels to watch

On the immediate upside, momentum above 1.3188 (May 24 high) seems to boost the pair to 1.3283 (March 25 high), above which the pair seems all set to continue with its upward trajectory towards 1.3500 psychological mark in the near-term.

On the flip side, 1.3120-1.3100 zone now seems to act as immediate support, which if broken seems to drag the pair to 1.3055 (Friday’s swing low) ahead of 1.2980 support (July 12 lows) also coinciding with 50-day SMA.