USD/CAD turns negative as oil gains traction

The USD/CAD pair reversed all of its gains to three-week high level of 1.3434 and has now drifted into negative territory. 

Currently flirting with 1.3400 handle, renewed strength in oil prices benefitted the commodity-linked currency - Loonie, and trigger a profit-taking slide following its recent upsurge of around 350-pips from the vicinity of the very important 200-day SMA. Adding to this, better-than-expected Wholesale Sales data from Canada exerted additional selling pressure. In fact, Canadian Wholesale sale reversed majority of its decline (-1.2%) recorded in the previous month and came-in to show a growth of 1.1% for October as compared to 0.6% rise expected.

However, broad based greenback strength, with the overall US Dollar Index surging to hit fresh 14-year high, extended some support and has limited further sharp downslide for the time being. 

With an empty US economic docket, sentiment surrounding oil markets would be a key factor driving the pair ahead of this week's key macro releases from the US and Canada. 

Technical levels to watch

From current levels, weakness below 1.3390-85 area is likely to get extended towards 50-day SMA support near 1.3345 region, which if broken seems to accelerate the slide further towards 1.3300 round figure mark. On the upside, renewed buying interest above 1.3420-25 area has the potential to lift the pair beyond session peak resistance near 1.3435 region towards its next major hurdle near 1.3480 area.