USD/CAD falls below 1.3650 as oil rally boosts Canadian dollar

USD/CAD declined 0.6% to 1.3640 as the Canadian dollar strengthened on the back of rising oil prices and broad US dollar weakness. WTI crude oil surged 2.1% to $78.50 per barrel on supply concerns and improving demand outlook, directly benefiting the commodity-linked loonie. The pair's recent bounce from 1.3600 proved short-lived as sellers emerged near the 1.3700 resistance level. Canadian employment data due next week could provide additional direction, with economists expecting 22,000 jobs added in May. Technical analysis shows USD/CAD breaking below the ascending trendline from April lows, suggesting a potential trend reversal. Immediate support lies at 1.3620, followed by the psychological 1.3600 level. Resistance is seen at 1.3680 and 1.3700. The combination of higher oil prices and dollar weakness creates a favorable environment for continued CAD strength.