USD/CAD continues scaling multi-week tops ahead of BOC

The USD/CAD pair maintained its strong bid tone for the third consecutive session and continued scaling fresh multi-week tops, further beyond 1.3300 handle.

Currently trading around 1.3330-35 region, the pair jumped to the highest level since January 23 amid resurgent US Dollar demand backed by various Fed officials endorsement for additional rate hike in the short term. Market participants now seemed convinced that the Federal Reserve could move towards raising interest rates at its upcoming meeting on March 14-15.

The pair continued gaining traction on Wednesday despite of a positive trading sentiment around WTI Crude oil prices, which tends to benefit the commodity-linked currency - Loonie, and the latest leg of up-move could be attributed to persistent short-covering ahead of the Bank of Canada monetary policy meeting, later during NA session.

Apart from BOC decision, the US economic docket featuring the release of personal income / spending data, the Fed’s preferred inflation gauge – Core PCE Price Index and ISM manufacturing PMI would also collaborate towards infusing a fresh bout of volatility around the major.

US: Upside risk for PCE inflation - AmpGFX

Technical levels to watch

The ongoing momentum seems strong enough to lift the pair beyond mid-1.3300s towards 1.3385-90 resistance area. A follow through buying interest would pave way continuation of the pair’s strong upward trajectory further towards its next major hurdle near 1.3430-35 region.

On the flip side, 1.3315 level now becomes immediate support to defend, below which the pair is likely to slide back towards 100-day SMA support near 1.3280-75 region. A convincing break back below 100-day SMA would accelerate the reversal move further towards mid-1.3200s ahead of 50-day SMA support near 1.3210 region.