USD/CAD jumps to 1.33 neighborhood amid weaker oil prices

The USD/CAD pair built on previous session's strong gains and is now attempting a move towards reclaiming the 1.3300 handle. 

Overnight sell-off in oil prices, with WTI crude oil tumbling to multi-month lows on renewed worries over global supply glut, weighed heavily on the commodity-linked currency - Loonie, and helped the pair to move away from near 4-month lows touched last week. Adding to this, persistent US Dollar buying interest, led by growing prospects for an additional Fed rate-hike action by the end of this year, further collaborated to the pair's up-move.

With oil prices under some bearish pressure, lack of any strong follow through greenback demand has failed to lift the pair further beyond the 1.3300 mark. Moreover, recent hawkish BOC rhetoric was also seen lending support to the Canadian Dollar and could also collaborated towards capping the pair’s upward trajectory, at least for the time being. 

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Today's US economic docket features the release of existing home sales data and would be looked upon for some trading impetus during early NA session. The pair's movement on Wednesday would also be influenced by the official EIA report on the US crude oil inventories, due later during the NY session. 

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Technical levels to watch

On a sustained break through the 1.3300 handle, the pair is likely to accelerate the up-move towards 1.3345-50 horizontal resistance before eventually aiming towards reclaiming the 1.3400 round figure mark.

On the downside, retracement back below 1.3270-65 zone now seems to find some support near 1.3235 level, below which the pair would turn vulnerable to head back towards challenging the 1.3200 handle.