USD/CAD struggles to preserve momentum above 1.30

The USD/CAD pair recovered above the 1.30 handle in the NA session on Monday and is marching towards its first positive daily closing after recording losses every single day of the previous week. At the moment, the pair is trading at 1.3003, up 0.32% on the day.

The pair's drive action seems to be dictated by the greenback's strength rather than the oil recovery. The barrel of West Texas Intermediate on Monday built on its recent recovery gains and refreshed its highest level since June 7. As of writing, the barrel of WTI is trading at $46.80, up 1.6% on the day. However, the commodity-linked loonie failed to take advantage of that as investors focused on the US Dollar rebound. Nevertheless, the pair is having a difficult time recording further gains above the 1.30 handle. 

• WTI extends the rally above $46.00

On the back of better-than-expected ISM Manufacturing PMI data, the US Dollar Index touched the 96 mark and went into a consolidation phase amid thinning trading volume ahead of tomorrow's Independence Day holiday. Furthermore, Canadian markets are closed on Monday, making it very unlikely to witness any sharp moves in the remainder of the session. As of writing, the DXY is at 95.93, up 0.57% on the day. 

Technical outlook

With today's recovery, the RSI on the daily graph is showing that the pair is correcting its oversold readings, but the pair could extend its gains as the recovery doesn't seem to be completed yet. With a daily close above 1.30, the pair could aim for 1.3115 (10-DMA) and 1.3195 (20-DMA). On the downside, short-term supports could be seen at 1.2970 (Jan. 31 low), 1.2905 (Sept. 5, 2016, low) and 1.2825 (Sept. 6, 206, low).