USD/CAD jumps to six-week highs near 1.2650 on falling oil prices

• USD/CAD is posting strong gains ahead of the American session on Friday.
• WTI is trading at its lowest level since early October below $77.
• Broad-based dollar strength is providing an additional boost to USD/CAD.

After closing virtually unchanged near 1.2600 on Thursday, the USD/CAD pair regained its traction and reached its strongest level in six weeks at 1.2657. As of writing, the pair was up 0.4% on a daily basis at 1.2650.

WTI slumps below $77

Falling crude oil prices seem to be weighing on the commodity-sensitive loonie on Friday. Prospects of increasing global oil supply and renewed concerns over resurging coronavirus cases hurting the energy demand is dragging oil prices lower. Currently, the barrel of West Texas Intermediate is trading at its lowest level since early October at $76.20, losing more than 3% on the day.

On the other hand, the risk-averse market environment is helping the greenback outperform its rivals and allowing USD/CAD to continue to push higher. 

Following a two-day correction, the US Dollar Index (DXY) is back above 96.00 ahead of the American session. In case Wall Street's main indexes edge lower after the opening bell, the DXY could preserve its bullish momentum. 

Meanwhile, the Canadian economic docket will feature September Retail Sales data, which is expected to reveal a monthly contraction of 1.7% and October Housing Price Index.

Technical levels to watch for