USD/CAD retreats from two-week highs, NFP in focus

The USD/CAD pair eroded part of early gains and retreated around 20-pips from two-week highs touched during mid-European session.

Bulls failed to lift the pair further through mid-1.3500s hurdle amid a modest recovery in oil prices, which extended some support to the commodity-linked currency - Loonie. Adding to this, retracing US treasury bond yields also did little to lend any support to the US Dollar and collaborated to the pair's retracement from higher levels. 

Meanwhile, traders also seemed to lighten their positions heading into the key event risk - the keenly watched US monthly jobs report (NFP), due in a short while from now. Today's economic docket also features the trade balance data from Canada and hence, guarantees a volatile trading session ahead.

   •  Canada: Trade balance expected to swing to a modest surplus of $100 mln in April – BMO CM

Technical levels to watch

From current levels, a follow through retracement below the 1.3510-1.3500 region now seems to drag the pair back towards 1.3460-55 intermediate support ahead of 1.3430-25 important support.

Alternatively, a clear break through 1.3550 level now seems to lift the pair towards the 1.3600 handle en-route next major hurdle near 1.3645-50 region.