Recovery in crude oil prices is seen helping the Canadian Dollar, with the USD/CAD pair trimming some of its strong gains posted on Friday to currently trade around 1.3150-60 region.

The pair on Friday recovered sharply from 1.3000 neighborhood after the release of impressive headline NFP reading from the US. The sharp recovery momentum got an addition boost as Canadian jobs report and trade balance data failed to impress markets. The pair even failed to benefit from the ongoing recovery in crude oil prices and touched weekly high level of 1.3200 round figure mark. 

On the first trading day of a new trading week, a mixed US Dollar performance and a extended recovery in crude oil prices is extending some support for the Canadian Dollar to recover some of its lost ground.

Next on tap would be the Fed’s Labor Market Conditions Index, the only data slated for release from the US economic calendar on Monday.

Technical levels to watch

On a sustained weakness below 1.3150 immediate support, the pair seems to extend the corrective move back towards the very important 200-day SMA support near 1.3100-1.3080 region. A follow through selling below 200-day SMA might now be looked upon a buying opportunity and hence, might now limit any further downslide at 1.3000 psychological mark.

On the flip side, sustained momentum above 1.3200 handle seems to lift the pair immediately towards 1.3254 (July 27 high), above which a fresh bout of buying interest now seems to pave way for continuation of the pair near-term upward trajectory.