USD/CAD keeps rising and tests 1.2500

• USD/CAD: rally from 4-month lows remains intact. 
• CAD weaker on lower oil. 
• USD upside reinforced by US data. 

The USD/CAD pair rose further on the back of a stronger US dollar and a slide in crude oil prices. The loonie is among the worst performers of the day. 

The greenback accelerated to the upside, after the release of US data. The US ISM non-manufacturing came in at 59.9, surpassing expectations of a reading at 56.6. Regarding details, the new orders component soared to 62.7 (highest since 2011), the employment component hit 61.6 (best since reading began in 1997) and the price paid component rose from 59.9 to 62. The data reinforced upbeat numbers of last week (NFP and Manufacturing PMI). 

On the opposite, the slide in crude oil prices weakened the loonie. The WTI was falling more than 1% at $64.25 a barrel. 

USD/CAD outlook 

USD/CAD was already moving with a clear upside bias after breaking on Friday key technical levels, including a short-term downtrend and posted the first daily close above the 20-day moving average since mid-December. As of writing, it is testing 1.2500, at the highest level since January 19. 

If it manages to break above, a potential target might be seen at 1.2545/50. Above the next relevant resistance could be located around 1.2600. On the flip side, if it fails to rise on top of 1.2500 a bearish correction seems likely. Support levels are 1.2450 (Asian session high), 1.2395 (Feb 5 low) and 1.2360 (Jan 29 low).