USD/CAD turns lower as oil extends rebound

Having posted a session high near 1.3710 region, the USD/CAD pair ran through some fresh offers and is currently probing daily lows near 1.3670-75 band.

The pair's latest leg of downslide could be attributed to the prevalent positive sentiment surrounding oil markets, with WTI crude oil holding gains marginally $46.50 amid renewed optimism over OPEC-led supply cuts extension beyond agreed June deadline. Higher oil prices, which tends to boost demand for the commodity-linked currency - Loonie, seems to be the sole factor weighing on the major.

   •  WTI edges higher to $46.50, API report in focus

The pair turned lower despite of broad based greenback buying interest. In fact, the key US Dollar Index was seen building on overnight gains further beyond the 99.00 handle, always backed by growing expectations for an eventual Fed rate-hike action, and seems to be lending some immediate support at least for the time being. 

   •  US Dollar moves to daily highs beyond 99.00

In absence of any top-tier economic releases on Tuesday, market focus would remain on the weekly API report on the US oil and refined product stockpiles, due later during NY session. Also in focus would be speeches by couple of FOMC members - Boston Fed President Eric Rosengren and Dallas Fed President Robert Steven Kaplan.

Technical levels to watch

Immediate support is pegged near 1.3640 level, below which the pair might turn vulnerable to break below the 1.3600 handle and head towards testing its next support near 1.3575-70 region. 

On the flip side, sustained momentum above the 1.3700 handle might continue to face some stiff resistance near 1.3730-35 area (yesterday's high), which if cleared could lift the pair beyond 1.3750 resistance and makr a fresh attempt towards reclaiming the 1.3800 handle.