USD/CAD flirting with lows near 1.3400 handle

After an initial tepid recovery move to 1.3460 region, the USD/CAD pair ran through fresh offers and dipped below 1.3400 handle.

The pair, however, has managed to bounce off few pips from 8-day lows and is currently trading around 1.3410 region. A broad based US Dollar profit-taking slide, in wake of a mild retracement in the US treasury bond yield, seems to be the only factor exerting some selling pressure around the major. 

Adding to this, positive mood surrounding oil market, with WTI crude oil trading with a gain of nearly 1%, is further extending support to the commodity-linked currency - Loonie, and collaborating to the pair's slide on Wednesday. 

From technical perspective, the pair has been flirting with 1.3400 important support, marking 38.2% Fibonacci retracement level of 1.3081-1.3598 post-US election up-surge. Hence, a convincing break below this immediate support might now open room for further near-term corrective slide.

Later during NY session, the FOMC meeting minutes would now be looked upon for fresh impetus for the pair's near-term trajectory. In the meantime, oil price dynamics would remain to be a key driver for the pair's movement. 

Technical levels to watch

On a sustained break below 1.3400 handle, the pair is likely to accelerate the slide towards 20-day SMA support near 1.3360 region en-route 1.3335 support (50% Fibonacci retracement level). On the upside, any recovery above 1.3435 level might continue to confront resistance near 1.3455-60 region above which the momentum could get extended towards 1.3475-80 confluence resistance, comprising of 10-day SMA and 23.6% Fibonacci retracement level.