USD/CAD trims recovery gains ahead of the final OPEC announcement

The USD/CAD pair built on to its recovery move from over one-month lows and refreshed session tops near mid-1.3400s following the US economic releases. The pair, however, trimmed some of recovery gains and is currently trading around 1.3425-20 band. 

A sharp slump in crude oil prices, despite of the news that OPEC members have agreed on 9-month output cut extension, weighed on the commodity-linked currency - Loonie, and helped the pair to bounce off from its lowest level since April 19. This coupled with a modest US Dollar rebound from multi-month lows provided an additional boost to the pair's recovery move. 

The greenback recovery picked-up pace during early NA session after the US weekly jobless claims continued pointing to the underlying strength in the labor market. Other US data released on Thursday showed wholesale inventories contracting in April, which got negated by ballooning goods traded deficit to a three-month high during April. 

Barring the initial tepid reaction to the US data, sentiment surrounding the pair would continue to be influenced by oil price-dynamics. Hence, any fresh headlines coming out of the ongoing OPEC - non-OPEC producers meeting might continue to fuel volatility ahead of the final announcement. 

Technical levels to watch

A follow through buying interest beyond 1.3450-60 resistance has the potential to continue lifting the pair further towards reclaiming the key 1.35 psychological mark before eventually darting towards its next major hurdle near 1.3535-40 region. 

On the downside, the 1.3400 handle remains immediate support to defend, which if broken should accelerate the slide towards 1.3330-25 strong horizontal support with some intermediate support near mid-1.3300s.