USD/CAD gains some traction amid weaker oil prices

The USD/CAD pair traded with positive bias through early European session and was seen building on to yesterday's tepid gains.

Currently placed at session tops near 1.3475 region, the pair is benefitting from a sharp retracement in oil prices and a modest pick-up in the greenback demand. 

Falling oil prices, with WTI crude oil struggling to decisively move back above the key $50.00 psychological mark, was seen weighing on the commodity-linked currency - Loonie. This coupled with a broad based US Dollar strength further collaborated to the bid tone surrounding the major. 

Despite of the up-move, the pair has held within its near-term trading range and remained capped below the 1.35 handle. Hence, it would be prudent to wait for a decisive break through the said handle before confirming that the pair might have bottomed out in the near-term.

Today's US economic docket, featuring the release of Fed's preferred inflation gauge - Core PCE Price Index, and Consumer Confidence Index would be looked upon to reinforce June rate-hike expectations and for some fresh impetus. Meanwhile, the Canadian current account balance and Raw Material Price Index (RMPI) might also help trader to grab some short-term trading opportunities.

Technical levels to watch

Any further up-move now seems to confront resistance near 1.3485-90 region, which if cleared might trigger a short-covering rally towards its next major hurdle near the 1.3535 region. On the flip side, 1.3445 level now becomes immediate support to defend, which if broken is likely to accelerate the slide back towards the 1.3400 handle en-route its next support near 1.3385-80 area.