USD/CAD recovers back above 1.3200 as oil breaks below $43.00 mark

The Canadian Dollar continues to be weighed down by weakness in crude oil prices, with the USD/CAD pair recovering from early drop below 1.3200 handle to currently trade flat around nearly 4-month high. 

In absence of any major economic releases, the pair continues to gain traction as a slide in crude oil prices, now trading well below $43.00/barrel mark, has been the key factor denting demand for commodity-linked currencies, including Loonie. The pair on Monday recorded gains for fifth straight session. 

Adding to this, the US Dollar bulls seemed resilient ahead of Wednesday's key Federal Reserve monetary policy decision announcement and accompanying rate statement. A hawkish rate statement would increase the prospects of an imminent Fed rate-hike later during this year and is likely to trigger a fresh leg of up-move for the greenback. 

From technical perspective, the pair has confirmed a break-out momentum above the very important 200-day SMA and hence, is likely to extend the bullish momentum in the near-future.

Technical levels to watch

From current levels, sustained momentum above 1.3240 level seems to boost the pair immediately towards 1.3285-1.3296 resistance (March 24-28 highs), above which the pair is likely to head towards 1.3400 round figure mark (March 15-16 highs).

On the flip side, weakness below session low support near 1.3170 seems to drag the pair towards 1.3115-10 support. Any further weakness below 1.3115-10 support could be short-lived and is likely to get bought into around the very important 200-day SMA support near 1.3080 region.