USD/CAD trim gains as crude oil recovers

USD/CAD moved sharply off daily highs in a few minutes after a strong bounce in crude oil price. The WTI rose from $44.50 (1-week low) toward $46.00 and favored the Loonie in the currency market.

Earlier the pair rose from 1.3010 and peaked at 1.3095, the highest level in a week. But then it retreated quickly, trimming daily gains in a few minutes. The decline from the near 1.3100 found support at 1.3025 and currently USD/CAD trades at 1.3041/45, 20 pips above yesterdays closing price.

USD/CAD key levels

On a wider perspective, the pair still holds a bullish tone but the area around 1.3100 - 1.3120 is a strong barrier that as it did in previous months it could again cap the upside. A consolidation significantly above 1.3120 could open the doors for a medium term rally.

On the downside, the key support is located around 1.2810/30, where an uptrend line from April lows currently stands. If its broken, the Loonie could gain momentum and push the pair to test 2016 lows.