USD/CAD rises above 1.29 as WTI plummets below $65 post-EIA

• EIA reports a surprise increase in US crude oil inventories.
• USD/CAD recovers above 1.29 on falling oil prices.
• DXY consolidates daily losses above mid-93s.

After dropping to a new weekly low at 1.2855 at the beginning of the NA session, the USD/CAD pair started to retrace its losses as lonnie failed to stay resilient against its rivals. At the moment, the pair is trading at 1.2910, still down 0.45% on the day.

The commodity-sensitive CAD came under a modest selling pressure after the weekly report released by the U.S. Energy Informative Administration showed an unexpected build in crude oil stockpiles. Although refineries ramped up their output to the highest level since February, crude inventories increased by 2.1 million barrels to surpass the experts' estimate of 1.8 million barrels.

Following the data, the price of a barrel of West Texas Intermediate fell below $65 and was last seen trading at $64.85, where it was down 1% on the day.

Earlier in the session, the data from Canada revealed that exports rose to a record high in April to bring the trade deficit down to $1.9 billion. Meanwhile, the Ivey PMI disappointed with 62.5 in May (vs. 69.7 expectation).

On the other hand, the trade balance in the U.S. came in at -$46.2 billion to beat the market consensus of -$49 billion. There won't be any other macroeconomic data releases in the remainder of the day and crude oil prices are likely to continue to impact the price action of the pair.

Technical outlook

The immediate resistance for the pair is located at 1.2955 (Jun. 6 high) ahead of 1.3000 (psychological level) and 1.3065 (Jun. 5 high). On the flip side,  supports could be seen at 1.2820 (50-DMA), 1.2730 (200-DMA/May 11 low) and 1.2690 (Apr. 9 low).