USD/CAD losses one big figure, tumbles to 1.3600 neighborhood as oil rally continues

The USD/CAD pair remained under intense selling pressure through early NA session and retreated over 100-pips from early Asian session highs, beyond the 1.3700 handle.

A sharp up-surge in oil prices, with WTI crude oil gaining over 3.0% in wake of a news report that Russia and Saudi Arabia have agreed to extend the output cut deal until March 2018, boosted demand for the commodity-linked currency - Loonie, and is weighing heavily on the major.

This coupled with persistent US Dollar selling pressure, against the backdrop of Friday's weaker monthly retail sales and inflation data, further collaborated to the pair's sharp downslide to its lowest level since April 27. 

   •  USD: The slide begins – HSBC

With Friday's dismal US macro data dampening expectations for a faster Fed rate-tightening cycle, albeit June rate-hike action still remains on the table, subdued action surrounding the US treasury bond yields did little to extend any support and stall the pair's ongoing slide. 

Moving ahead, focus now shifts to the US economic docket, featuring the release of Empire State Manufacturing Index, for some immediate respite for the US Dollar bulls.

Technical levels to watch

On a sustained break below the 1.3600 handle, the pair seems vulnerable to extend the ongoing slide towards the key 1.3500 psychological mark, with some intermediate support near 1.3565-60 region. On the upside, 1.3645-50 area now seems to act as immediate resistance and any further recovery beyond this hurdle might now be capped at the 1.3700 handle.