USD/CAD turns lower, slides back below 1.3400 handle

The USD/CAD pair once again failed to sustain strength above 1.3400 handle and is now extending its reversal from close to Friday's multi-month highs.

Currently trading around 1.3385 region, the pair's latest leg of weakness could be attributed to profit taking, which got aggravated on a decisive break below 1.3400 handle. Moreover, a rebound in crude oil prices, with WTI crude oil recovering majority of its losses from session low, is further boosting demand for the commodity-linked currency - Loonie, and exerting additional selling pressure around the major.

Today's US economic docket features the release of Core PCE Price Index (the Fed's preferred inflation gauge), personal income / spending data for the month of September and Chicago PMI. From Canada, the release of RMPI (Raw Material Price Index) and IPPI (Industrial Product Price Index) would also be looked upon for short-term trading opportunities.

Technical levels to watch

On a sustained weakness below 1.3375 immediate support, the pair is likely to accelerate the slide immediately towards 1.3340 support en-route 1.3300 round figure mark. Meanwhile on the upside, recovery momentum back above 1.3400 handle might continue to confront resistance near 1.3425 area, which if cleared decisively would open room for further near-term appreciating move for the pair.