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    USD/CAD jumps to 1.2900 neighborhood as oil slides sharply Haresh Menghani

    A sudden bout of US Dollar buying interest seems to have emerged at lower level, with the USD/CAD pair reversing all of its losses to 1.2825 and surging to session high level.Earlier during the day, the major failed to extend its recent appreciating move and was dragged lower after rising for four consecutive days. The pair, however, witnessed a remarkable turnaround after the US Empire State Manufacturing Index and Producer Price Index printed better-than-expected readings for the month of May. Meanwhile, Canadian monthly Manufacturing Sales also witnessed a sharp rebound and printed a better-than-expected growth of 1%, but did little to boost the Canadian Dollar. The reason for the sudden reversal surrounding the loonie could be attributed to a sharp slide in crude oil prices that have now dropped well below $48.00 handle to the lowest level since May 23.Next on tap will be the crucial FOMC meeting, which is likely to determine the near-term trajectory for the greenback. From technical perspective, the pair is now sustaining its strength above 50-day SMA and hence could further extend the appreciating move in the near-term.Technical levels to watchFrom current levels, momentum above 1.2900 handle is likely to get extended towards 1.2965-70 horizontal resistance, above which the pair seems all set to reclaim 1.3000 psychological mark and head back towards retesting its next major resistance near 1.3100 round figure mark.Alternatively, reversal from current levels and a subsequent weakness back below 50-day SMA, resistance turned support, near 1.2860 region, now seems to exert additional selling pressure that might force the pair to dip below 1.2800 handle.

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