USD/CAD slides further, drops to 6-day low as oil extends recovery

Extending its sharp reversal from last week's multi-week highs, the USD/CAD pair traded weak for third consecutive day and has now dipped below 100-day SMA region to currently trade at 6-day low level around 1.2930-35 band. 

Last week, the pair once again failed to attract fresh buying interest above 200-day SMA and fell sharply back below 200-day SMA following Friday's release of weaker-than-expected headline NFP print. The mildly disappointing US monthly jobs report and a lower-than-expected Canadian monthly trade deficit data attracted fresh selling pressure around the major. 

Meanwhile, recovery in crude oil prices (now back above $45.50/barrel) is seen benefitting the commodity-linked currency - loonie, and is contributing to further selling pressure surrounding the major. 

With both the US and Canadian markets closed in observance of Labor Day, the pair would continue to take cues from the prevalent sentiment surrounding crude oil prices.

Technical levels to watch

On a sustained trade below 1.2930-20 immediate support, the pair could extend its downslide even below 1.2900 handle towards testing its next an important horizontal support near 1.2960-50 region. On the flip side, any recovery attempt back above 1.2960 resistance now seems to confront strong resistance near 1.3000 psychological mark, which if cleared might negate bearish bias and help the pair to make a fresh attempt to decisively clear the very important 200-day SMA resistance.