USD/CAD clings to gains beyond 1.3500 handle

Having dipped below 1.3500 handle in the previous session, the USD/CAD pair regained traction on Tuesday and is now building on to its up-move back above the said handle. 

Currently trading around 1.3530-35 region, the pair caught fresh bids on Tuesday as the incoming Canadian economic data, including last week's dismal monthly GDP print and CPI reading, seems to have renewed speculations that the BoC might ease its monetary policy further, and if not, would surely delay any rate-hikes, which is eventually weighing on the Canadian dollar.

Meanwhile, the prevalent positive sentiment surrounding oil markets, with WTI crude oil trading back above $53.00/barrel mark with a gain of around 0.5%, has failed to provide any respite for the commodity-linked currency - Loonie, and the pair remained closer to last week's 5-week high. 

With Canadian markets closed in observance of Boxing Day, focus would remain on the US economic docket featuring the release of Conference Board's consumer confidence index for December and would be looked upon for fresh impetus during early NA session. 

Technical levels to watch

A follow through buying interest above 1.3540 session peak has the potential to lift the pair, beyond last week's multi-week high resistance near 1.3557, towards testing its next resistance near 1.3589 region (Nov. 14 high). On the downside, weakness below 1.3510-1.3500 immediate support, leading to a subsequent drop below 1.3485-80 support, is likely to accelerate the corrective slide towards its next support near 1.3420 level.