USD/CAD clings to gains near session tops, eyeing 1.3500 mark post-Canadian data

   •  The prevalent risk-off mood continues to benefit the greenback’s relative safe-haven status.
   •  Weaker oil prices undermine Loonie and remain supportive; stronger Ivey PMI capped gains.

The USD bid tone picked up the pace during the early North-American session and pushed the USD/CAD pair back closer to the overnight swing high, or over one- week tops.

The pair quickly reversed an early dip to the 1.3400 neighbourhood and regained positive traction on the back of resurgent US Dollar demand, supported by the prevailing risk aversion amid renewed fears over a full-blown US-China trade war.

A fresh escalation of the US-China trade tensions weighed heavily on crude oil prices, which undermined demand for the commodity-linked currency - Loonie and further collaborated to the pair's goodish intraday up-move of around 80-pips.

The already strong greenback got a minor boost from some optimistic comments by Dallas Fed President Robert Kaplan, saying that the US economy is expected to remain healthy and ruled out any economic downturn or recession in the near term 

Meanwhile, the Canadian Dollar failed to gain any respite from upbeat domestic data, showing that Ivey PMI unexpectedly jumped to 55.9 in April as compared to 54.3 recorded in the previous month and consensus estimates pointing to a reading of 53.0.

With investors still awaiting fresh trade-related headlines, it would now be interesting to see if the pair is able to capitalize on the positive momentum or once again meets with some fresh supply at higher levels ahead of a scheduled speech by the Fed Governor Randal Quarles.

Technical levels to watch