USD/CAD steadily climbs to session top, around mid-1.3200s

The USD/CAD pair climbed around 20 pips from daily lows and refreshed session tops in the last hour, albeit lacked any strong follow-through.

The pair showed some resilience below the very important 200-day SMA and managed to find some support near the 1.3225 region (overnight swing lows) despite the prevalent selling bias surrounding the US dollar.

Sliding oil prices lend some support

Weaker crude oil prices, now down around 0.70% for the day, undermined demand for the commodity-linked currency – loonie and turned out to be one of the key factors that helped limit the pair's early downtick.

Oil prices on Tuesday retreated farther from multi-week tops amid growing concerns about a slowing global demand outlook, which outweighed the recent OPEC+ agreement to deepen crude output cuts in early 2020.

Meanwhile, the intraday uptick seemed rather unaffected by some renewed USD weakness, led by persistent uncertainty about a potential phase one US-China trade deal and the ongoing slide in the US Treasury bond yields.

It, however, remains to be seen if the pair is able to capitalize on the momentum or meets with some fresh supply at higher levels amid absent relevant market-moving economic releases on Tuesday, either from the US or Canada.

This coupled with investors' reluctance to place aggressive bets ahead of the highly anticipated FOMC monetary policy update on Wednesday might further contribute toward capping any runaway rally for the major.

Technical levels to watch