USD/CAD digesting recent up-surge to yearly tops

The CAD remained on backfoot against its American counterpart, helping the USD/CAD pair to hold steady at yearly tops near the key 1.3500 psychological mark.

Wednesday's stellar ADP report further bolstered expectations that the Fed would raise interest rates at its meeting next week and prolonged the ongoing up-surge in the US treasury bond yields. Rising bond yields helped the US Dollar to extent its recent uptrend and assisted the pair to continue scaling higher.

This coupled with a slump in oil markets, with WTI crude oil hitting the lowest since December on Wednesday, lifted the pair to its highest level since late December. Surging US crude oil inventories, as depicted by the EIA report released on Wednesday, dragged crude oil prices sharply lower and weighed heavily on the commodity-linked currency - Loonie. 

Traders even shrugged off the upbeat release of Canadian Building Permits data, with the greenback and oil price-dynamics being exclusive drivers of the pair's near-term strong bullish momentum.

Today's US economic docket features the release of usual weekly jobless claims data, while from Canada the release of New Housing Price Index (NHPI) might provide some impetus during early NA session.

Technical levels to watch

A follow through buying interest above the 1.3500 handle has the potential to lift the pair towards 1.3560-65 resistance area, above which the pair seems all set to aim towards testing Dec. 2016 highs resistance near 1.3600 round figure mark.

On the flip side, 1.3460 level now seems to protect immediate downside, which if broken is likely to accelerate the corrective slide towards 1.3415-10 area ahead of a major support near 1.3375-70 region.