USD/CAD reverses a dip to sub-1.3400 level as Oil retreats from daily tops

   •  The USD climbs to 3-week lows and helped show resilience at lower levels.
   •  An intraday slide in Oil prices undermine Loonie and remained supportive.
   •  Traders seemed rather unaffected by weaker US housing market data.

The USD/CAD pair quickly reversed an intraday dip to sub-1.3400 level and rallied around 30-pips during the early North-American session.

The pair extended its recent pullback from levels beyond the key 1.3500 psychological mark and dropped to over one-week tops in the last, albeit once again showed some resilience below the 1.3400 round figure mark.

The US Dollar held on to its daily gains near three-week tops - rather unaffected by a subdued action around the US Treasury bond yields and turned out to be one of the key factors that extended some support to the major.

This coupled with a modest intraday pullback in Oil prices undermined the commodity-linked currency - Loonie and further collaborated to the pair's goodish bounce to the 1.3420-25 region, though lacked strong follow-through.

On the economic data front, the disappointing release of existing home sales data from the US did little to influence the price action, with the USD/Oil price dynamics turning out to be key factors driving the pair on Tuesday.

It would now be interesting to see if the pair is able to capitalize on the rebound or once again meets with some fresh supply at higher levels as the focus remains on Wednesday's important release of the latest FOMC meeting minutes.

Technical levels to watch