USD/CAD jumps back above mid-1.2800s, closer to weekly tops

   •  A sharp retracement in crude oil prices weighs on the commodity-linked Loonie.
   •  Renewed USD buying provides an additional boost and remains supportive. 
   •  All eyes remain glued to the release of latest FOMC policy meeting minutes.

The USD/CAD pair continued gaining positive traction for the second consecutive session on Wednesday and was seen building on overnight recovery from 1-1/2 week lows. 

A sharp slide in crude oil prices, which tends to dent demand for the commodity-linked currency - Loonie, was seen as one of the key factors behind the pair's strong rally of around 80-pips from an intraday low level of 1.2743.

The momentum extended through the Asian session on Wednesday and was further supported by some renewed US Dollar buying interest, and a follow-through retracement in crude oil prices. 

Adding to this, technical buying above 50-day SMA, which has been acting as a key pivot over the past two weeks, further assisted the pair to build on the previous session's solid rebound. 

Currently trading near the 1.2870 region, the pair has now moved within striking distance of weekly tops set on Monday and a subsequent move back towards the 1.2900 handle, amid some repositioning trade ahead of today's key release of the latest FOMC meeting minutes, now looks a distinct possibility.

Technical levels to watch

The 1.2890-1.2900 region might continue to act as an immediate resistance, above which the pair is likely to head towards challenging the 1.2945-50 supply zone before eventually darting towards the key 1.30 psychological mark.

On the flip side, 50-DMA, currently near the 1.2830 region, now seems to protect the immediate downside, which if broken might turn the pair vulnerable to break below the 1.2800 handle and head towards retesting the 1.2750-40 support.