USD/CAD surges to fresh multi-month highs

The greenback recovery against its Canadian counterpart seems to have gained momentum and lifted the USD/CAD pair to a fresh daily peak, also marking the pair's highest level since March. 

Currently trading around 1.3170 region, a sharp retracement in crude oil prices (now losing nearly 2.5%) is weighing heavily on the commodity-linked currency - loonie. Moreover, the prevalent risk-off sentiment across European markets provided an additional boost to the greenback and assisted the pair to surpass highs touched during Asian session on Tuesday.

Later during NY trading session, the release of CB consumer confidence index for September would provide fresh impetus for short-term traders. Focus would also be on comments from Federal Reserve Vice Chairman Stanley Fischer, which will be looked upon for fresh clues over the Fed's near-term monetary policy outlook and would drive the pair further from current levels.

Technical levels to watch

From current levels, the momentum seems strong enough to lift the pair immediately to 1.3300 round figure mark above which a fresh leg of bullish momentum might set in and continue boosting the pair further, initially towards 1.3320-25 intermediate resistance and eventually towards its next major hurdle near 1.3400 handle.

On the flip side, previous strong resistance near 1.3240 level now becomes immediate support to defend, which if broken might now find strong support near 1.3200 handle. Any further weakness below 1.3200 mark might now be short-lived and is likely to be bought into near 1.3150 support area.