USD/CAD regains traction as oil turns lower

The USD/CAD pair maintained its bid tone for the third consecutive session, albeit remained below Thursday's two-week high level beyond 1.3400 mark. 

Currently trading around mid-1.3300s, the pair on Thursday reversed sharply led by a sharp recovery in oil on news reports stating that Kuwait reduced its supply more than previously pledged. The pair subsequently dropped to 1.3315 region during Asian session on Friday amid mild US Dollar retracement as investors digested Wednesday's hawkish FOMC statement.

However, the pair caught fresh bids at lower level amid fading optimism surrounding Kuwait supply cut news. In fact, WTI crude oil has now drifted into negative territory and is currently trading with a loss of over 0.5%, around $50.60 region, which is seen weighing on the commodity-linked currency - Loonie. 

Next in focus would be US housing market data that include - building permits and housing starts, which would be looked upon for fresh impetus during early NA session. 

Technical levels to watch

Momentum above 1.3375 level is likely to lift the pair back above 1.3400 handle and a follow through buying interest above Thursday's two-week high (1.3417) should open room for continuation of the pair's near-term uptrend towards 1.3435-40 intermediate resistance en-route 1.3500 psychological mark. On the downside, weakness below session low support near 1.3320 region is likely to drag the pair back below 1.3300 handle towards testing its next support near 1.3240-35 horizontal area.