USD/CAD hits 1.2850 on the way up the charts

• The Dollar rally has stepped the USD/CAD pair back into a bullish trend for now.
• BoC speech on Wednesday could send the CAD lower again if dovish sentiment remains in the rhetoric.

The USD/CAD pair has advanced rapidly, and the pair is trading near 1.2840.

The US Dollar has bounded against the Loonie, closing higher against the CAD for the last four consecutive trading days. The CAD initially fed the bearish move of its own accord, dropped back by a dovish Bank of Canada (BoC) and middling economic data that left Loonie bulls on the short side of their rate hike expectations, but the US Dollar rebound in the broader market is extending the move, spurred on by climbing US yields as the 10-year Treasury inches closer towards the key 3 percent mark.

The most notable events for the pair this week will be the BoC's Poloz speech on Wednesday at 23:15 GMT, where Loonie traders will be hoping to grasp a better understanding of what the BoC has in store in terms of interest rate expectations further down the road.

USD/CAD Levels to watch

With the pair's rapid advance, traders will be looking for a snap back to the 50.0 Fibo level at 1.2690, with further support from the 200-day SMA at 1.2625, while bulls will be looking to push the USD/CAD back up into March's highs near 1.3125.