USD/CAD attempting a fresh move towards 1.3400 handle

The USD/CAD pair gained further traction during European trading session and has now jumped to a fresh session peak, albeit remained below last week's 10-day high level beyond 1.3400 mark. 

Currently trading around 1.3365-70 region, the pair was seen building on to hawkish Fed statement-led sharp recovery move from the vicinity of the very important 200-day SMA. The pair, however, has repeated failed (in past two trading sessions) to sustain its move above 50-day SMA as rising crude oil prices, which tends to benefit the commodity-linked currency - Loonie, has been the key factor restricting the pair's up-move. The pair is now making yet another attempt to build on to its momentum above the said moving average, despite of buoyant sentiment surrounding oil prices. Hence, a follow through buying interest above 1.3400 handle would confirm a bullish break-out and open room for continuation of the pair's near-term upward trajectory.

In absence of any major market moving economic releases, the pair would continue to be driven by oil market price dynamics and the broader sentiment surrounding the greenback as markets digest last week's hawkish FOMC statement.

Technical levels to watch

From current levels, 1.3400 handle remains immediate strong hurdle, which if conquered is likely to boost the pair beyond 1.3417 (Dec. 15 high) towards 1.3440 resistance (Dec. 1 high). On the downside, sustained weakness below 1.3345-40 region (50-day SMA), leading to a break below 1.3315-10 horizontal support, is likely to accelerate the slide towards 1.3280-75 horizontal resistance, en-route 1.3235 support area.