USD/CAD consolidating recent gains to multi-month highs

The USD/CAD pair was seen consolidating yesterday's strong gains above 1.3300 handle, closer to seven month highs touched on Monday.

Currently trading in neutral territory around mid-1.3300s, a steep fall in crude oil prices, with WTI crude oil now trading well below $50.00 psychological mark, is weighing on the commodity-linked currency - Loonie, and extended support to the major on Wednesday. Moreover, increasing prospects of an eventual Fed rate-hike action and broad based US Dollar strength has been key theme in the FX market of-late, which might now limit any sharp slide for the pair. 

Looking ahead, today's US economic releases - flash services PMI and new home sales data will be looked upon for short-term trading opportunities, while broader sentiment surrounding crude oil prices would also contribute towards the pair's movement on Wednesday. However, this week's US macro data that include - monthly durable goods orders and Q3 GDP print, would help investors determine the next leg of directional move for the pair.

Technical levels to watch

From current levels, 1.3370 level (yesterday's high) is likely to act as immediate resistance above which the pair is likely to make a fresh attempt towards reclaiming 1.3400 handle. On the downside, weakness below session low support near 1.3330-25 area seems to get extended towards 1.3300 round figure mark. Any further slide below 1.3300 handle is likely to get bought into and hence, should be limited around 1.3280-75 region (Tuesday's low).