USD/CAD tests 1.35 on USD strength

After failing to stay above the 1.35 handle earlier in the European session, the USD/CAD caught a bullish wave in the NA session as the greenback started to gather strength against its major rivals. As of writing, the pair is trading at 1.3491, still down 0.08% on the day.

Boosted by the solid performance of the U.S. Treasury yields, the US Dollar Index broke above the 97 mark, where it struggled to hold yesterday, and refreshed its session high at 97.17. At the moment, the index is at 97.11, up 0.25% on the day. The 10-year T-bond yield is at 2.274%, rising nearly 1% on the day. Helped by the rising bond yields, the probability of a June rate hike leaped above 80% according to the CME Group FedWatch Tool.

• US: Business activity growth rebounds in May, led by service sector - Markit

On the other hand, crude oil's bullish momentum started to fade as the investors are waiting for the OPEC meeting that will take place on Thursday. The barrel of West Texas Intermediate is trading at $51.30, up only 0.3% on the day, failing to support the loonie. Additionally, today's data revealed that the wholesale sales rose 0.9% in March missing the expectations of 1.1%. 

• WTI trims losses, back around $51.00 ahead of API
• Goldman Sachs warns of 2018 oil glut amid optimism over OPEC cut extension - CNBC
• Canada: Wholesale sales rose 0.9% in March and surpassed the $60 billion mark for the first time

Technical outlook

With a clean break above 1.3510 (50-DMA), the pair could aim for 1.3590 (10-DMA) and 1.3645 (20-DMA). To the downside, supports could be seen at 1.3455 (Apr. 20 low), 1.3400 (psychological level) and 1.3320 (Apr. 10 low).