USD/CAD rises to session high as oil resumes downslide

Extending its rebound from 1.3000 psychological mark, the USD/CAD pair is now trading at session high level near the very important 200-day SMA region ahead of ISM Manufacturing PMI.

Renewed weakness in crude oil prices is seen weighing on the Canadian Dollar. Adding to this, a tepid recovery in the greenback, as measured by the US Dollar Index, is also assisting the USD/CAD pair to extend its rebound from a 7-day low level touched on Friday.

On Friday, disappointing US GDP print for second-quarter of 2016 led to a sharp slide in the US Dollar and provided much needed respite to falling oil prices, extending strong support for commodity-linked currency - Loonie. Friday's sharp slide took the USD/CAD pair back below 200-day SMA.

Going ahead, investors now look forward to today's release of US ISM manufacturing PMI data for the month of July, which is expected to tip lower to 53.1 as compared to June's 53.2.

Technical levels to watch

On the upside, bullish momentum above the very important 200-day SMA resistance near 1.3082-85 region seems to get extended immediately towards 1.3130-50 region. A sustained break above 1.3150 resistance now seems to negate any near-term bearish outlook for the pair and trigger a fresh leg of up-move.

Meanwhile on the downside, 1.3000 psychological mark remains immediate support to defend, which if broken should drag the pair immediately towards 100-day SMA support near 1.2950 region. A follow through selling pressure below 100-day SMA support would now turn the pair vulnerable to continue drifting lower in the near-term.