USD/CAD adds to gains above 1.37 post-Canadian data

Following a failed attempt to hold above the 1.37 handle in the late Asian session, the USD/CAD pair retraced its gains towards 1.3670 in the European trading hours and found support there. However, as the greenback continued to gather strength against its competitors, the pair caught another bullish wave and pushed above 1.37 to reach a fresh session high at 1.3730. As of writing, the pair was trading at 1.3727, adding 0.24%, or 32 pips, on the day.

On Tuesday, the US Dollar Index was able to build on yesterday's gains and reached its highest level since the bearish opening gap after the first round of French presidential election at 99.50. The index is now up 0.41%, at 99.44. Heightened expectations of a Fed June rate hike seems to the primary reason behind the solid demand for the greenback as there were no data to support that move. 

On the other hand, the latest data from Canada revealed that the value of building permits issued by Canadian municipalities fell 5.8% in March after contracting 2.5% in February, putting more weight on the loonie. Furthermore, crude oil's recovery attempts continue to be capped on the uncertainty regarding the extension of the supply cut deal, further hurting the commodity-linked CAD. Investors will be looking to FOMC member Kaplan's speech ahead of the API weekly crude stocks report for fresh impetus.

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Technical outlook

The pair faces the initial resistance at 1.3735 (2016, Feb. 25 high) ahead of 1.38 (psychological level) and 1.3860 (2016, Feb. 24 high). To the downside, supports align at 1.3700 (psychological level), 1.3645 (May 8 low) and 1.3600 (psychological level/Dec. 28 high).