USD/CAD reversal from 100-DMA gains momentum, drops below 1.2970

Recovery in crude oil prices seems to boost demand for the Canadian Dollar, with the USD/CAD pair now extending Monday's reversal from 1.3120 level to currently trade well below 1.3000 psychological mark around 1.2965 region.

A slight improvement in global risk-appetite seems to dent the safe-haven appeal of the US Dollar and assisting recovery in commodities - like oil, and boosting demand for commodity-linked currencies - like the Canadian Dollar. 

Despite of the sharp up-surge on Friday, led by the unexpected outcome of the Brexit referendum, and Monday's follow through buying interest, the pair failed to clear 100-day SMA barrier and is now seen reversing from the important moving-average resistance. 

Further downslide, however, might be limited by 50-day SMA support around 1.2940-35 region as investors now await for fresh impetus from today's final US GDP print for the first quarter of 2016 and Consumer Confidence index, scheduled for release later during NY trading session. Investor will also take near-term directional bets from Tuesday's API data on weekly crude oil inventories ahead of the official EIA report on Wednesday, which is likely to drive crude oil prices in the near-term and eventually affect the USD/CAD pair.

Technical levels to watch

From current levels, 50-day SMA near 1.2940-35 region seems to protect immediate downside. Failure to hold this immediate support is likely to force the pair to break below 1.2900 handle and extend its slide immediately towards 1.2850 horizontal support. Conversely, strength back above 1.3000 psychological mark, leading to momentum above 1.3030 resistance, seems to assist the pair back towards retesting the very important 100-day SMA resistance around 1.3100 round figure mark, which if conquered seems to assist the pair immediately towards May highs resistance around 1.3170-75 area.