USD/CAD surges through 1.3200 handle, US CPI in focus

After a brief pause on Thursday, the USD/CAD pair resumed with its near-term bullish momentum and has now erased all of its previous session losses to currently trade at a fresh session high, beyond 1.3200 handle.

A fresh bout of weakness in crude oil prices has been the key factor weighing on the commodity-linked currency - loonie. Moreover, a possible unwinding of greenback short positions, ahead of the US CPI release, could have also contributed to the pair's sharp up-surged in the past couple of hours. 

Traders on Friday will also confront the release of Canadian manufacturing sales and preliminary UoM Consumer Sentiment index for September from the US, later during NA session. Meanwhile, Fed rate-hike expectations would continue to drive the pair ahead of the actual announcement next week on September 21.

Technical levels to watch

From current level, the ongoing momentum is likely to boost the pair immediately towards 1.3225-30 resistance area above which the pair seems all set to head towards July monthly high resistance near 1.3250-55 region. On the flip side, weakness back below 1.3190 level now seems to find support at 1.3150, which is closely followed by support at 1.3125 level.