USD/CAD stick to losses near mid-1.3400s in pre-Fed subdued action

The USD/CAD pair traded with bearish bias on Wednesday, albeit has managed to bounce off few pips from session low after US economic data.

The pair's offered tone could primarily be attributed to a strong recovery in oil prices, with WTI crude oil trading with gains in excess of 1.5%, which is seen boosting demand for the commodity-linked currency - Loonie. 

Meanwhile, a mixed action in the US bond markets has failed to provide any clear direction for the US Dollar. Against the backdrop of the in-line with estimates release of US macro data - CPI print and monthly retail sales, the short-end yields (2-yrs) shot higher while longer-term yields (5, 10 & 30 years) were seen retracing further. 

Despite of today's weak performance, the pair remains within yesterday's trading range as markets keenly await for the highly anticipated outcome from a two-day FOMC meeting, due to be announced later during the NY session. 

With the imminent Fed rate-hike action a done deal, signals about the central bank's next course of action would now act as a catalyst for the pair's near-term direction. Hence, focus would remain on the rate statement, updated economic projection, and the Fed chair Janet Yellen's press conference. 

Technical levels to watch

Immediate support is pegged near 1.3440 area, below which the pair is likely to accelerate the slide towards 1.3415-10 support before eventually dropping to its next major support near 1.3375-70 region.

On the upside, momentum above 1.3480-85 zone, leading to a subsequent break through the 1.35 psychological mark, now seems to pave way for continuation of the pair up-move beyond recent multi-month highs resistance near 1.3535 level towards 1.3555-60 strong hurdle.