USD/CAD drops to fresh session low as oil continues to surge

The USD/CAD pair's attempted recovery back above 1.3400 handle got sold into and the pair has now dropped to fresh session low.

Currently trading around 1.3365 region, the pair came under some selling pressure after disappointing release of US weekly jobless claims data. According to the Labor Department, initial jobless claims rose by 17,000 to a seasonally adjusted 268K for the week ended November 25, while continuing claims rose by 38,000 to 2.081 million. The readings were higher than consensus forecast and failed to attract any fresh US Dollar buying interest.

Moreover, oil prices built on to OPEC deal-led strong gains recorded on Wednesday, with WTI crude oil now trading comfortable above $50.00 psychological mark, which was seen benefitting the commodity-linked currency - Loonie, and exerted further selling pressure around the major. 

Next on tap would be RBC Manufacturing PMI from Canada followed by US ISM manufacturing PMI for the month of November ahead of Friday's NFP data.

Technical levels to watch

Immediate downside support is pegged near 1.3357 (yesterday's low), which if broken is likely to drag the pair immediately towards 50-day SMA support near 1.3325 region. On the upside, 1.3400 handle now becomes immediate resistance above which the recovery momentum could get extended towards session peak resistance near 1.3440 level.