USD/CAD back above 1.3400, still mildly weaker ahead of US ISM PMI

Having posted a session low at 1.3378, the USD/CAD pair managed to recover majority of its early lost ground to move back above 1.3400 handle ahead of US economic data. 

Currently trading around 1.3420 region, the pair extended its near-term range-bound price-action and has ignored OPEC deal-led prevalent upbeat sentiment surrounding crude oil, which tends to benefit the commodity-linked currency - Loonie. In fact, WTI crude oil added on to Wednesday's strong gains and traded with gains of over 1.0%, hovering around $50.0/barrel psychological mark.

Also on Wednesday, the pair did break below 1.3400 handle after the oil cartel announced first agreement in eight years to cut its crude oil production, which was further supported by better-than-expected Canadian GDP print. The weakness, however, turned short-lived as rallying crude oil prices added to US inflation expectations, which has been already boosted by prospects of aggressive fiscal spending under Trump administration, and fueled speculations of higher US interest rates. Moreover, Wednesday's upbeat ADP report further boosted investor confidence of stronger US economic growth in 2017 and was supportive of renewed greenback demand. 

On the economic data front, the weekly jobless claims, ISM manufacturing PMI from the US, accompanied by RBC's Canadian manufacturing PMI will be in focus during early NA session on Thursday.

Technical levels to watch

Immediate upside resistance is pegged near 1.3435-40 region (session peak) above which the pair seems dart towards 1.3480 (Nov. 29 high) en-route 1.3500 psychological mark. On the downside, 1.3400 handle now seems to act as immediate support, which if broken might continue to find support near 1.3380 level (session low) ahead of 1.3456 level (yesterday's three-week low).