USD/CAD digesting strong up-surge to multi-week tops, BOC awaited

The USD/CAD pair was seen building on to previous two session's strong up-move back above 100-day SMA and held above 1.3300 handle near 5-week tops.

Currently trading around 1.3310-15 region, the pair has been persistently weakening since the beginning of this week despite of a range bound action around the key US dollar index and WTI crude oil, which tends to derive demand for the commodity-linked currency - Loonie. 

Tuesday's up-move, however, was led by hawkish comments by a number of Fed officials on Tuesday, which revived hopes for a Fed rate-hike action at its upcoming meeting in March. Meanwhile, possibilities of some short-stops getting triggered on a decisive strength above 50-day SMA strong hurdle near 1.3200 handle could have further aggravated the up-move, lifting the pair back above 100-day SMA for the first time since Jan. 24.

Today's key focus would be BOC monetary policy decision where the central bank is widely expected to hold rates steady but market attention would be on policymakers' comments, which might trigger a fresh bout of volatility in the major. 

Technical levels to watch

Immediate resistance is pegged near 1.3335 level (Jan. 23 high), above which the pair seems to aim towards 1.3385-90 resistance (Jan. 20 high) ahead of 1.3435-40 strong hurdle. On the flip side, weakness below 1.3300 handle now seems to find immediate support at 100-day SMA near 1.3275 region, which if broken is likely to drag the pair back towards 1.3235-30 intermediate support, en-route 50-day SMA resistance turned support near 1.3215-10 region.