USD/CAD sinks to session low near 1.3150 despite of weaker oil prices

The Canadian dollar defied broad based US Dollar strength and weaker oil prices, with the USD/CAD pair sinking to session lows near mid-1.3100s.

The pair once again failed to capitalize on its early up-move and sustain its move to 1.3200 handle. The pair subsequently ran through some fresh offers and has now reversed part of previous session's strong gains.

A modest recovery in oil prices, with WTI crude oil bouncing off lows to currently trade within striking distance of reclaiming $52.00/barrel mark, was seen supporting the commodity-linked currency - Loonie. 

Moreover, Tuesday's better-than-expected Canadian trade surplus continues to underpin the Canadian Dollar and further collaborated towards accelerating the pair's retracement move from two-week highs touched yesterday.

Later during the day, EIA's crude oil inventories report would influence oil prices and as a result of high degree of correlation, would provide fresh impetus for the major. Meanwhile, housing starts data out of Canada would also be looked upon for some short-term trading opportunities during early NA session.

Technical levels to watch

Immediate support is pegged at the very important 200-day SMA near 1.3130-25 region below which the pair is likely to break below 1.3100 handle and head towards testing 1.3070-60 horizontal support. On the flip side, momentum above 1.3185 immediate resistance might assist the pair back towards 1.3200 handle, which if conquered seems to accelerate the up-move towards 50-day SMA resistance near 1.3250-55 region.