USD/CAD retreats back to mid-1.3400s as oil extends recovery

The USD/CAD pair's recovery move stalled ahead of the key 1.35 psychological mark and has retreated back to mid-1.3400s.

A goodish recovery bounce in oil markets, which tends to boost demand for the commodity-linked currency - Loonie, seems to be a key factor for the pair's retracement from session peak. In fact, WTI crude oil extended recovery from three-month lows and is now trading with gains of 0.65%, around $48.70 region.

Meanwhile, with the Fed rate-hike move on Wednesday seen as a done deal, a moderate pick-up in the US treasury bond yields underpinned the US Dollar demand and is helping the major to hold within previous session's daily trading range. 

On the economic data front, the release of monthly PPI print from the US, followed by API report on US crude stockpiles are due for release during NA session on Tuesday.

Technical levels to watch

Bears would be eyeing for a decisive break below 1.3425-20 immediate support, below which the pair is likely to break through the 1.3400 handle and head towards testing 1.3375-70 support area.

On the upside, 1.3475-80 region now seems to have emerged as immediate resistance, which if cleared has the potential to lift the pair beyond the 1.3500 handle towards its next resistance near 1.3515 level.