USD/CAD extends slide toward 1.35 as WTI recovers above $47

• Oil recovery helps the CAD gather strength.
• US Dollar Index slumps to mid-96s despite upbeat ADP data.
• Coming up: ISM Manufacturing PMI report from the U.S.

The USD/CAD pair came under a renewed selling pressure in the last hours and fell to its lowest level in two weeks at 1.3514. As of writing, the pair was down 0.4% on the day at 1.3520.

A decisive recovery sen in crude oil prices ahead of the weekly API data seems to be the primary reason behind the pair's recent fall. The barrel of West Texas Intermediate, which closed the previous day at $46.30, rose above the $47 mark by adding more than 2% and boosted the demand for the commodity-related loonie.

On the other hand, despite the fact that the ADP reported a higher-than-expected growth in the U.S. private sector employment in December, the greenback struggled to gather strength and the US Dollar Index dropped to mid-96 area, where it was down 0.15% on a daily basis. Falling U.S. T-bond yields amid the dominant risk-off mood seems to be making it difficult for the dollar to take advantage of the upbeat data. Later in the session, the ISM will release its Manufacturing PMI report. 

On Friday, investors will be paying close attention to the labour market data from both Canada and the United States.

Technical levels to consider

The initial support for the pair aligns at 1.3500 (psychological level) ahead of 1.3445 (Dec. 20, 2018, low) and 1.3360 (50-DMA). On the upside, resistances align at 1.3640 (daily high), 1.3665 (Dec. 31, 2018, high) and 1.3720 (May 15, 2017, high).