USD/CAD loses momentum ahead of 1.35 as WTI settles below $49

Boosted by the falling crude oil prices, the USD/CAD pair reached its session high at 1.3492 and started to retrace its gains. As of writing, the pair was trading at 1.3477, up 70 pips, or 0.5% on the day.

OPEC's decision to extend production cuts for nine more months was not seen as a good enough effort to rebalance the oil market as it didn't include any new countries nor deeper cuts, which were rumored earlier this week. After buying the rumor in the previous days, traders sold the fact, pushing the barrel of West Texas Intermediate to a fresh weekly low at $48.45. Following the sharp drop, the barrel of WTI seems to have settled around $48.70, down more than 5% on the day.

• OPEC, non-OPEC oil output cuts remains about 1.8 million barrels per day - REU
• OPEC Conference President: exports will drop as summer domestic use rises
• OPEC Conference President: all indications are that nine-month extension is optimal

In the meantime, the US Dollar Index is comfortably sitting above the 97 handle in the NA session, making it difficult for the pair to make a noteworthy correction. There won't be any data releases from Canada on Friday and investors will look at the GDP and personal consumption expenditures from the U.S. for fresh fundamental catalysts. 

Technical outlook

With a decisive break above 1.3500 (psychological level), the pair could aim for 1.3540 (May 24 high) and 1.3615 (20-DMA). On the downside, supports could be seen at 1.3400/1.3390 area (May 24 low/daily low), 1.3340 (200-DMA) and 1.3300 (psychological level).