USD/CAD soars through 1.3100 handle

The greenback maintained its strong bid tone against its Canadian counterpart, with the USD/CAD pair surpassing the very important 200-day SMA and 1.3100 handle with ease to currently trade at a fresh 7-day.

A fresh bout of USD buying interest is exerting selling pressure around dollar-denominated commodities, including oil, and is eventually helping the commodity currency - loonie, build on to Friday's strong gains led by hawkish comments from FOMC member Eric Rosengren and disappointing Canadian unemployment rate. 

Expectations over the Fed's next monetary policy action remains a key determinant for the pair and hence, investors will now keep a close watch on today's speech from the Fed Governor Lael Brainard, who is considered as one of the most dovish FOMC members. A further hawkish signal would further fuel speculation that the Fed would go ahead an raise interest-rates at its meeting on September 20-21 and should trigger a fresh leg of up-move for the pair. 

Technical levels to watch

From current levels, 1.3148-50 region (multi-week highs) remain key resistance area to watch for. A clear strength above this immediate resistance now seems to pave way for continuation of the pair's upward trajectory, even beyond 1.3200 handle, towards a multi-month highs resistance near 1.3250 region.

On the flip side, 1.3100 round figure mark now becomes immediate support, which is followed by support at the very important 200-day SMA near 1.3060 region. Only a decisive break back below 200-day SMA support would negate the near-term bullish expectations and turn the pair vulnerable to further downside in the near-term.