USD/CAD continues to gain traction, jumps closer to mid-1.3700s

The USD/CAD pair regained traction on Thursday and spiked back above the 1.3700 handle, reversing all of its losses posted in the previous session. 

Currently trading around 1.3740-35 region, testing session tops, spot caught fresh bids after Moody's downgraded  the credit ratings of Canada's Big Six banks quoting weakening credit conditions on the back of a surge in household debt. 

   •  Moody's downgrades Canadian Banks on challenging environment

Meanwhile, market seems to have largely ignored a follow through up-move in oil prices, which tends to benefit the commodity-linked currency - Loonie. In fact, WTI crude oil was seen building on to Wednesday's sharp up-move led by weekly EIA report that showed a larger than expected drawdown in domestic crude oil inventories.

Adding to this, a mildly positive tone surrounding the US Dollar, always backed by increasing odds for an eventual Fed rate-hike move in June, further collaborated to the pair's sharp up-move from weekly lows support near mid-1.3600s. 

Later during the NA session, the release of PPI print and weekly jobless claims data from the US, along with the release of New Housing Price Index (NHPI) from Canada would now be looked upon for some fresh impetus.

Technical levels to watch

Immediate upside resistance is pegged near 1.3750 level, above which the pair is likely to make a fresh attempt to surpass the 1.3800 handle and head towards testing its next resistance near 1.3840-45 zone. On the flip side, retracement back below the 1.3700 handle might continue to find support near mid-1.3600s, which if broken decisively should trigger a corrective slide even below the 1.3600 handle towards an important horizontal support near 1.3560-55 area.