After an initial dip to 1.2170 level, the USD/CAD pair regained some traction and might now be looking to build on its up-move beyond the 1.2200 handle.
In absence of any fresh fundamental development, retracing oil prices seems to be only factor supportive of the pair's modest uptick at the start of a new trading week. In fact, WTI crude oil has now moved on the verge of breaking below the key $50.00 psychological mark and was seen weighing on the commodity-linked currency - Loonie.
Meanwhile, a mildly positive tone around the US Treasury bond yields, which although has failed to provide any fresh bullish impetus to the US Dollar was also seen lending some support to the pair's up-move to the 1.2210 region.
Next on tap would be the release of Canadian foreign securities purchases, followed by the US NAHB Housing Market Index. However, this week's FOMC decision on Wednesday would remain a key determinant of the pair's near-term trajectory.
Technical levels to watch
Immediate resistance is pegged near 1.2240-45 area, above which the pair is likely to aim towards reclaiming the 1.2300 handle before eventually darting towards its next major hurdle near the 1.2330-35 region.
On the flip side, 1.2170 level, closely followed by mid-1.2100s now seems to protect immediate downside, which if broken decisively could drag the pair back towards the 1.21 handle.
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