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   “¢   A follow-through pullback in oil prices undermine Loonie and provided an additional boost.
   “¢   The USD holds steady near 22-month tops and remained supportive of the positive move.
   “¢   The key focus will remain on the latest BoC monetary policy update, scheduled later today.

The USD/CAD pair continued gaining positive traction through the early European session on Wednesday and is currently placed at near seven-week tops, just above mid-1.3400s.

A combination of supporting factors continued fueling the positive momentum for the second consecutive session and assisted the pair to build on the overnight bullish break through the 1.3400 handle – the top end of a three-week-old consolidative trading range.

The US Dollar held steady just below 22-month tops set on Tuesday and remained supported by the stronger US housing market data, which added to the recent upbeat retail sales figures and eased concerns of a slowdown in the world’s biggest economy.

This coupled with a follow-through pullback in crude oil prices, from fresh 2019 highs touched yesterday, further dented demand for the commodity-linked currency – Loonie and remained supportive of the ongoing positive move to the highest level since March 8.

The Canadian Dollar was further weighed down by growing market conviction that the Bank of Canada (BoC), at its latest monetary policy meeting this Wednesday, may again strike a more cautious tone amid the recent softness in the domestic economy.

The constructive set-up clearly points to an extension of the ongoing positive momentum, even beyond YTD tops, towards reclaiming the key 1.35 psychological mark ahead of this week’s more relevant market moving economic releases from the US.

Technical levels to watch