• USD preserves FOMC minutes-led strong gains.
• CAD weighed down by weaker oil prices.
• Canadian retail sales data eyed for fresh impetus.
The USD/CAD pair extended its consolidative price action and was seen oscillating within a narrow trading band around the 1.2700 handle, or near two-month tops.
The pair swung from an intraday low level of 1.2625, touched in reaction to the latest FOMC meeting minutes, and rallied over 75-pips after details revealed that policymakers supported the need to keep raising interest rates.
With the US Dollar managing to preserve its recent gains, a fresh wave of selling pressure around crude oil prices weighed on the commodity-linked currency - Loonie and remained supportive of the pair’s upbeat tone through the early European session.
It, however, remains to be seen if bulls are able to build on the momentum or continue facing difficulty in breaking through the key 200-day SMA barrier, currently near the 1.2715-20 region.
On the economic data front, today's important release of the key Canadian monthly retail sales, along with the usual weekly jobless claims data from the US would now be looked upon for some fresh impetus. Later in the day, the weekly EIA US crude oil inventories data would also influence the pair's momentum and help grab short-term trading opportunities.
Technical levels to watch
A decisive move beyond the 1.2715-20 barrier (200-DMA) now seems to pave the way for an extension of the pair's bullish trajectory towards the 1.2790-1.2800 supply zone. On the flip side, any meaningful retracement is likely to find support near mid-1.2600s and is closely followed by 100-day SMA support near the 1.2625-20 region.
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