USD/CAD tests highs near 1.3450 ahead of US ISM

The Canadian dollar has given away its initial gains vs. its American peer on Tuesday, with USD/CAD now regaining some traction after testing lows near the 1.3400 handle.

USD/CAD attention to ISM

CAD keeps its buying interest intact today in response to the upbeat tone in crude oil prices, with the barrel of West Texas Intermediate hovering over fresh tops near the $55.00 mark, levels last seen in July 2015.

The ongoing CAD strength is managing to pair the prevailing USD firm fashion, which continues to recover part of the ground lost during last week on increasing scepticism over the ability of the Fed to hike three times throughout the current year.

Adding to CAD upbeat tone, the latest CFTC report showed speculative net shorts have decreased to levels last seen in late September during the week ended on December 27.

In the data space, US ISM Manufacturing will grab all the attention later in the NA session, with consensus expecting the indicator to have improved a tad to 53.5 during last month from 53.2.

USD/CAD significant levels

As of writing the pair is gaining 0.04% at 1.3446 facing the next hurdle at 1.3511 (high Dec.30) followed by 1.3575 (50% Fibo of the 2016 drop) and finally 1.3601 (high Dec.28). On the downside, a break below 1.3386 (low Jan.2) would aim for 1.3375 (20-day sma) and then 1.3311 (38.2% Fibo of the 2016 drop).