USD/CAD extend Tuesday’s retracement from 3-week tops, back below 1.3400 handle

The USD/CAD pair extended previous session's sharp reversal from three-week tops and has now slipped below the 1.3400 handle.

Currently trading around 1.3390-85 band, testing session lows, ongoing up-move in the WTI crude oil prices boosted demand for the commodity-linked currency - Loonie, was seen weighing on the major. 

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Meanwhile, the greenback remained on the back foot in wake of Tuesday's news suggesting that the House Republicans are looking to revive the healthcare bill, instead of moving on to the tax reforms. Adding to this, nervousness ahead of the upcoming meeting between the US President Donald Trump and Chinese President Xi Jinping, refrained investors from placing / carry bullish US Dollar bets. In fact, the key US Dollar Index reversed previous session's recovery gains and further collaborated to the mildly weaker sentiment surrounding the major. 

On the economic data front, the release of ADP report, ISM non-manufacturing PMI and EIA crude oil inventories would now be looked upon for fresh impetus. Apart from the US macro data, the release of minutes from the latest FOMC meeting would also be in focus and might assist investors to determine the pair's next leg of directional move.

Technical levels to watch

Immediate support is pegged near 1.3380-75 area, below which the is likely to head back towards 1.3355-50 support area en-route 1.3325-20 horizontal support and 100-day SMA important support near the 1.3300 region.

On the upside, sustained momentum back above 1.3400-1.3410 zone might assist the pair to move back towards testing 1.3445-50 resistance area, which if cleared seems to set the stage for continuation of the pair's upward trajectory initially towards 1.3480 intermediate resistance ahead of the key 1.35 psychological mark.