USD/CAD sits near 1-week tops, just above 1.3400 handle
• The USD finds some support after better-than-expected housing market data.
• Bearish oil prices undermine Loonie and remained supportive of the uptick.
• Bulls seemed reluctant ahead of Wednesday’s FOMC monetary policy update.
The USD/CAD pair quickly reversed a mid-European session dip to the 1.3390 region and jumped back closer to one-week tops set earlier today.
The recent sharp US Dollar retracement from 1-1/2 year tops found some support ahead of the 96.00 handle following the better-than-expected release of US housing market data - housing starts and building permits.
This coupled with the prevailing bearish sentiment surrounding crude oil prices undermined the commodity-linked currency - Loonie and further collaborated to the pair's sudden spike in the last hour.
Despite a goodish intraday bounce of around 20-25 pips, bulls seemed to lack any strong conviction and refrained from placing any aggressive bets amid uncertainty over the Fed's rate hike path in 2019.
Hence, the key focus will remain on the latest FOMC monetary policy update, scheduled to be announced on Wednesday, which will influence the near-term USD price dynamics and eventually provide a fresh directional impetus to the major.
Technical levels to watch
Any subsequent up-move is likely to confront some resistance near multi-month tops, around the 1.3445 region, above which the pair is likely to aim towards reclaiming the key 1.3500 psychological mark. On the flip side, the 1.3390-80 region now seems to have emerged as immediate support, which if broken might turn the pair vulnerable to accelerate the slide towards mid-1.3300s en-route the 1.3320-15 support area.