USD/CAD spikes to fresh session tops, near 1.26 handle
| • Stronger USD helps regain positive traction.
• Loonie fails to benefit from bullish oil prices.
The USD/CAD pair caught some fresh bids on Tuesday and might now be eyeing to move back above the 1.2600 handle.
On Monday, the pair did breakthrough 50-day SMA barrier but failed to build on the up-move, amid subdued trading conditions on the back of a holiday in the US.
A fresh wave of US Dollar buying interest largely offset bullish crude oil prices, which tends to underpin demand for the commodity-linked currency - Loonie, and helped the pair to regain traction on Tuesday.
Today's up-move could also be attributed to some follow-through technical buying, especially after yesterday's near-term bullish break. It, however, remains to be seen if bulls are able to maintain their dominant position of the pair continues with its struggle to sustain/build on its momentum beyond 100-day SMA hurdle, currently near the 1.2620 region.
There aren't any major market-moving economic releases due release today and hence, the USD price-dynamics might continue to act as an exclusive driver of the pair's momentum ahead of this week's important releases, including the FOMC meeting minutes and the latest Canadian inflation figures.
Technical levels to watch
Momentum beyond the 1.2600 handle is likely to confront some resistance near the 1.2620 region (100-DMA) and is followed by mid-1.2600s supply zone. A follow-through buying interest has the potential to continue boosting the pair further towards the 1.2700 handle.
On the flip side, the 1.2555-50 region now seems to have emerged as immediate support, which if broken might turn the pair vulnerable to head back towards challenging the key 1.2500 psychological mark.
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