The USD/CAD pair seems have entered a consolidative phase and has been confined within a broader trading range above the 1.3300 handle.
Currently trading around mid-1.3300s, the pair has managed to hold above 100-day SMA support but has been struggling to clear its immediate horizontal resistance near 1.3375 area. Also on Monday, the pair did break lower to 1.3300 neighborhood but recovered higher to wipe out early day losses despite of better-than-expected Canadian Wholesale Sales data for January.
The recovery, however, lacked momentum and conviction amid a sharp recovery in WTI crude oil, which was seen supporting demand for the commodity-linked currency - Loonies.
On Tuesday, a follow through recovery move in oil prices has kept a lid on the pair's up-move. Moreover, a muted US Dollar price action, against the backdrop of perceived less hawkish Fed policy outlook, has also failed to provide any fresh impetus and has been a key factor for the pair's range-bound price action within 40-pips narrow trading range.
Moving ahead, market participants now look forward to comments from the New York Fed President William Dudley. Later during early NA session, the release of Canadian monthly retail sales data and the US current account deficit figures, would be looked upon for some short-term trading opportunities.
Technical levels to watch
On the upside, 1.3370-75 area remains immediate resistance, which if cleared is likely to lift the pair towards reclaiming the 1.3400 handle, en-route 1.3425-30 horizontal resistance.
On the downside, sustained weakness back below 1.3315-10 immediate support now seems to drag the pair back below 100-day SMA support near 1.3295 region towards retesting 1.3275 support area ahead of mid-1.3200s.