USD/CAD holding steady above 1.3400 handle post-data

The USD/CAD pair retreated few pips from session peak but has managed to maintain mildly positive bias after Canadian and the US trade balance data.

Currently trading around 1.3410 region, the pair witnessed a knee jerk slide of around 20-pips after Canadian trade balance data came-in to show better-than-expected surplus of $0.81 billion for January. The data was far better-than consensus estimates pointing to a surplus of $70 billion but failed to continue benefitting the Canadian Dollar as trade balance data for the month of December was revised sharply lower to show a surplus of $45 billion, down from $92 billion reported earlier.

Meanwhile, the US trade deficit surged to $48.5 billion in January, up from previous month's $44.3 billion deficit, but did little to distort a mildly bullish sentiment surrounding the greenback.  In fact, the key US Dollar Index has now climbed to fresh session peak near 101.80 region and remained well supported by growing market consensus that the Fed would eventually move towards raising interest-rates in March.

Elsewhere positive sentiment surrounding oil markets, with WTI crude oil holding with strong gains of over 0.7%, seems to lend some support to the commodity-linked currency - Loonie, and collaborating towards restricting the major up-move just below Friday's two-month high near 1.3435-40 region.

With today's economic data out of the way, market participants now look forward to Wednesday's release of ADP report on the US private sector employment, which acts as a pre-cursor to the official jobs data (NFP), scheduled for release on Friday. In the meantime, broader market sentiment surrounding the greenback and oil price-dynamics would be key determinants of the pair's movement on Tuesday. 

Technical levels to watch

Bulls would be eyeing for a break through 1.3425-30 resistance area, above which the pair is likely to resume its prior appreciating move and head towards testing 1.3460 resistance ahead of the key 1.3500 psychological mark.

On the downside, 1.3380-75 region remains immediate support to defend, which if broken decisively is likely to accelerate the slide towards 1.3315 horizontal support before the pair eventually drops to test 100-day SMA support near 1.3285-80 region.