USD/CAD touches a nearly three-week top on Monday, albeit lacks follow-through buying.
Retreating Oil prices undermines the Loonie and lends support amid modest USD strength.
Bulls need to wait for a sustained strength beyond the 50-day SMA before placing fresh bets.
The USD/CAD pair attracts some dip-buying near the 1.3240 area on Monday and touches a nearly three-week high during the Asian session. Spot prices, however, struggle to capitalize on the modest uptick and currently trade around the 1.3250 region, nearly unchanged for the day.
Crude Oil prices edge lower as bulls opt to take some profits off the table following the recent rally to the highest level since April 19 touched on Friday. This, in turn, is seen undermining the commodity-linked Loonie, which, along with the emergence of some US Dollar (USD) buying, acts as a tailwind for the USD/CAD pair. That said, the uncertainty over the Federal Reserve's (Fed) future rate-hike path, fueled by an extremely resilient US economy and signs of colling inflationary pressures, holds back traders from positioning for any further gains for the major.
From a technical perspective, any subsequent move up is more likely to remain capped near the 1.3300 strong horizontal support breakpoint, now turned resistance. The said handle now coincides with the 50-day Simple Moving Average (SMA) and should act as a pivotal point. A sustained strength beyond might trigger a short-covering rally and lift the USD/CAD pair towards the 1.3360 hurdle en route to the monthly peak, around the 1.3385 region. Some follow-through beyond the 1.3400 mark should pave the way for a further near-term appreciating move.
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