Having posted a session high near 1.3670 level, the USD/CAD pair retreated around 50-pips from session tops and has now erased majority of its daily gains.
Spot failed to benefit from today's upbeat US economic data - weekly jobless claims and Philly Fed Manufacturing Index, which lifted the US treasury bond yields across all maturities and underpinned the greenback demand. In fact, the key US Dollar Index extended its recovery move from multi-month lows and is currently placed at session tops, beyond mid-97.00s, but did little to attract any fresh buying interest around the major.
Market even seems to have shrugged off the prevalent negative sentiment surrounding oil markets, which usually tends to weigh on the commodity-linked currency - Loonie. Meanwhile, a modest recovery from lows, with WTI crude oil bouncing off from $48.00 neighborhood seems to be only factor that could be attributed to the pair's retracement from highs.
Looking at the broader picture, the pair remains within its near-term broader trading band and hence, it would be prudent to wait for a decisive break through the range before committing to the pair's next leg of directional move.
Up next would be the US Treasury Secretary Steven Mnuchin's testimony on Rollback of Dodd-Frank Financial Regulations before the Senate Banking Committee, which might influence surrounding the greenback and provide some trading impetus.
Technical levels to watch
A follow through retracement below the 1.3600 handle could get extended towards the trading range support near 1.3575-70 area, below which a fresh wave of selling pressure has the potential to drag the pair towards its next support near 1.3515-10 region.
On the flip side, sustained move above mid-1.3600s could trigger a short-covering rally back towards the 1.3700 handle before the pair eventually darts towards its next major hurdle near mid-1.3700s.