USD/CAD eases from 18-month tops, bulls struggle above 1.3500 handle

   “¢   The USD fails to build on the post-FOMC rebound and remained on the defensive.
   “¢   The ongoing bearish fall in oil prices weighing on Loonie and helps limit downside.

The USD/CAD pair held within striking distance of over 18-month tops, albeit seemed struggling to build on the momentum further beyond the key 1.3500 psychological mark.

Against the backdrop of Wednesday’s softer than expected Canadian inflation figures, a sudden fall in crude oil prices weighed heavily on the commodity-linked Loonie and helped the pair to find decent support ahead of the 1.3400 handle.

The up-move got an additional boost, lifting the pair to its highest level since early-June 2017, amid a goodish US Dollar rebound after not so dovish FOMC monetary policy statement/economic projections, foreseeing two rate hikes in 2019.

The greenback, however, failed to capitalize on the overnight rebound and remained on the defensive, which was eventually seen exerting some downward pressure on the major, though the downside might still be limited amid the ongoing bearish fall in crude oil prices.

Hence, it would be prudent to wait for a strong follow-through long-unwinding/meaningful retracement before confirming that the pair might have already printed a near-term top around the 1.3500 handle.  

There aren’t any major market-moving economic releases due either from the US or Canada and hence, the USD/oil price dynamics might continue to act as key determinants of the pair’s momentum through Thursday’s trading session.

Technical levels to watch