USD/CAD turns neutral at 1.3165, ignores tepid oil recovery

Having posted a session low at 1.3128, the USD/CAD pair has managed to erase majority of its early losses and has now moved back close to Tuesday's closing level to currently trade around 1.3165 level.

Although prospects of an eventual Fed rate-hike action in September seems to have faded, the US Dollar continues to attract buying interest at lower levels as market participants seemed convenience that the Fed might be moving closer to announce a rate-hike, at least once during the current calendar year.

Meanwhile, the Canadian Dollar has failed to benefit from a tepid recovery witnessed in crude oil prices, which now awaits for fresh impetus from the EIA crude oil inventory data later during US trading session. Also during NA trading session, US import prices data will be in focus for immediate momentum play. 

In the meantime, the pair is likely to take cues from investor risk appetite / aversion, which currently seems to favor the safe-haven appeal of the greenback amid prevalent cautious sentiment in European equity markets. 

Technical levels to watch

From current levels, 1.3190 (yesterday's low), 1.3200 handle (August 5 high) remains immediate resistance, which if conquered is likely to trigger an immediate short-covering rally towards July swing high resistance near 1.3250-55 region.

On the flip side, weakness below session low support near 1.3130 region is likely to find support at 1.3100 handle below which the pair might head back to retest the very important 200-day SMA resistance break point, now turned strong support near 1.3060-55 region.