USD/CAD tumbles to over 2-week lows amid surging oil prices

The USD/CAD pair remained heavily offered on Monday and has now dropped below 1.3650-45 horizontal support to fresh monthly lows.

The pair came under intense selling pressure after today's news that Russia and Saudi Arabia have agreed to extend the output cut deal until March 2018, which triggered a sharp rally in oil markets and eventually benefitted the commodity-linked currency - Loonie. In fact, WTI crude oil jumped around 2.5%, to $49.00/barrel mark, and has been a key factor weighing on the major. 

Meanwhile, a subdued greenback price-action, with the key US Dollar Index extending Friday's disappointing US data (monthly retail sales and inflation figures)-led retracement did little to stall the pair's downslide to 1.3635-30 region, the lowest level since April 28.

With today's downslide, the pair now seems to have confirmed a near-term break-down and hence, a follow through corrective slide now seems a distinct possibility.

Later during the NA session, a relatively lighter US economic docket, featuring the only release of Empire State Manufacturing Index, might do little to provide an fresh impetus, with oil price-dynamics being as an exclusive driver for the pair's movement at the start of a new trading week. 

Technical levels to watch

From current levels, the 1.3600 handle is likely to protect immediate downside, which if broken could accelerate the slide towards 1.3575-70 horizontal support before the pair eventually darts towards testing its next major support near 1.3515-10 region.

On the flip side, any recovery back above mid-1.3600s now seems to confront strong hurdle near 1.3690-1.3700 area, above which a bout of short-covering could lift the pair back towards 1.3745-50 strong barrier.