USD/CAD trims some of its gains, but holds closer to multi-month tops post macro data

The USD/CAD pair trimmed some of its early gains closer to multi-month tops, albeit has managed to hold in positive territory following macroeconomic releases. 

Currently trading around 1.3640 region, the pair had a muted reaction to US data showing that the economy registered a growth of 0.7% annualized growth during the first quarter of 2017. The growth was worse than previous quarter's 2.1% and lower-than estimates pointing to a reading of 1.2%. The data further fueled concerns of a sharp economic slowdown and did little to provide any immediate respite for the US Dollar bulls. 

   •  US: Real GDP increased at an annual rate of 0.7% in the first quarter of 2017

On the other hand, the monthly Canadian economic activity remained flat on a monthly basis during Feb., which was on expected lines and eased some of the bearish pressure surrounding Canadian Dollar.

   •  Canada: GDP was unchanged in February following three months of growth

Adding to this, a rebound in oil prices, with WTI crude oil trading with gains in excess of 1.0% further extended support to the commodity-linked currency – Loonie, and collaborated towards capping further up-move, just below the highest level since late-Feb. 2016.

Friday's US economic docket also features the release of Chicago PMI and Revised UoM Consumer Sentiment, which although is unlikely to hinder the pair strong bullish momentum but might provide opportunities for short-term traders. 

Technical levels to watch

A follow through buying interest beyond 1.3665-70 area should lift the pair towards reclaiming the 1.3700 handle and open room for continuation of the upward trajectory further towards its next major hurdle near 1.3770-80 region.

On the downside, retracement back below the 1.3600 handle might prompt additional profit taking slide towards 1.3570 level ahead of 1.3540-35 strong horizontal support.