USD/CAD manages to hold 1.3500 handle ahead of US retail sales

The USD/CAD pair witnessed profit taking move on Tuesday and reversed part of Monday's gains to the highest level since late Feb.

Currently trading weaker around 1.3520 level, Tuesday's slide could be categorized as a consolidative phase and is supported by recovery in crude oil prices, which tends to boost demand for commodity-linked currencies - like Loonie, and is exerting some selling pressure around the major.

Further downslide, however, was limited as the greenback continues to find buying interest at lower levels amid increasing bets of an eventual Fed rate-hike action. CME group's FedWatch Tool is now pointing to over 85.0% probability of such a Fed move in December and is underpinning the US Dollar. 

Next in focus would be US economic releases that include - monthly retail sales, Empire State Manufacturing Index and import price data, and would be looked upon for short-term trading opportunities.

Technical levels to watch

On a sustained weakness below 1.3500 psychological mark, the corrective slide could get extended towards 1.3465-60 region en-route 1.3415 support area. On the upside, 1.3555 level seems to act as immediate resistance above which the pair is likely to make a fresh attempt towards 1.3600 round figure mark.