USD/CAD extends slide below 1.3100 to lowest in 12 weeks

• The Canadian dollar is among the top performers on Friday. 
• USD/CAD drops despite dollar’s strength on the back of positive US data. 
• Crude oil prices bounce back above $54.00. 

The USD/CAD pair broke below the key 1.3115/20 support area and tumbled to 1.3082, the lowest level since November 7. The pair resumed the move lower that started early January from above 1.3600. 

The Loonie is among the top performers on Monday supported by technicals and also by higher crude oil prices. The WTI is up 1.50%, back above $54.50. Crude oil continues to be supported by production cuts and the Venezuelan crisis. 

Regarding the greenback, data released today from the US showed better-than-expected numbers from the labor market and also the manufacturing sector, but inflation indicators remained low, in line with the FOMC tone of the last meeting. The US dollar is posting mix results across the board, rising sharply versus the yen amid higher US yields. 

Levels to watch 

To the downside, the immediate support is seen at 1.3080, followed by 1.3050 and 1.3020. Now the 1.3115 region has become the key short-term resistance followed by 1.3160 and above 1.3195/1.3200. If the US dollar manages to rise back on top of 1.3200 it would remove the bearish pressure and could point to a correction.