USD/CAD reverses Monday’s BOC Poloz-led slide

After Monday's brief pause, the USD/CAD pair resumed with its near-term bullish trajectory and reversed Monday's corrective slide to sub-1.3300 handle.

Currently trading around 1.3330 region, albeit off session peak level of 1.3363, the pair caught fresh bids after BOC Governor Stephen Poloz clarified that his comments to wait for the next 18 months was not in context to the central bank's monetary policy. Late on Tuesday, the pair reversed sharply from the vicinity of 1.3400 handle as market participants interpreted the "18-months" comment in respect to interest rates and provided a boost to the Canadian Dollar. 

On Tuesday, a broad based greenback strength, as measured by the overall US Dollar Index, on growing prospects of a December Fed rate-hike action lifted the pair back above mid-1.3300s. However, rebound in crude oil prices underpinned demand for the commodity-linked currency - Loonie, and restricted further upside for the pair. 

Later during NA session, the release of Conference Board's Consumer Confidence Index for October will be looked upon for fresh impetus and for short-term trading opportunities.

Technical levels to watch

From current levels, 1.3335-40 horizontal area seems to act as immediate resistance above which the pair is likely to make a fresh attempt towards retesting 1.3400 handle. On the downside, sustained weakness below 1.3300 handle, leading to a subsequent drop below 1.3280-75 (session low area), is likely to drag the pair immediately towards 1.3220-1.3200 support area.