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   “¢   The overnight selloff in Oil prices undermined Loonie and helped bounce off lows.
   “¢   The USD regains traction following the release of FOMC policy meeting minutes.
   “¢   Sustained move beyond the 1.3500 handle needed to confirm any further gains.

The USD/CAD pair continued gaining positive traction for the second straight session on Thursday and built on the overnight strong rebound from one-month lows.

The pair witnessed a dramatic turnaround on Wednesday and rallied around 80-pips from an intraday low level of 1.3357 – the lowest since April 23, touched in reaction to upbeat Canadian retails sales figures.  

A sell-off in Crude Oil prices weighed heavily on the commodity-linked currency – Loonie and triggered the initial leg of recovery, which accelerated further on the back of a goodish pickup in the US Dollar demand.

The greenback got an additional boost after minutes of the latest FOMC meeting reaffirmed the central bank’s patient approach to rate-change and dampened speculations about an immediate interest rate cut.  

The combination of supporting factors prevailed through the early part of Thursday’s trading session and continued fueling the momentum, helping the pair to move back closer to the top end of its weekly trading range.  

It would now be interesting to see if bulls are able to capitalize on the positive move and extend the momentum further beyond the key 1.3500 psychological mark amid absent relevant market moving economic releases.

Technical levels to watch