USD/CAD off session lows, still well-offered near 1.3150 level

After an initial slump to the vicinity of 1.3100 handle, the USD/CAD pair has managed to recovery around 30-pips from session low and is currently trading marginally below mid-1.3100s.

Following an agreement between OPEC and non-OPEC over the weekend, to cut their cumulative oil production, surging crude oil prices lifted the commodity-lined currency - Lonnie, dragging the USD/CAD major to its lowest level since Oct. 20. As markets digested the initial reaction to oil production deal, a bullish consolidation in oil prices helped the pair to witness a minor pull-back from nearly two-month lows.

Moreover, traders also seemed to position themselves cautiously and might have been inclined to take some profits off their bearish USD bets ahead of the upcoming FOMC decision on Wednesday, where the central bank is widely expected to raise interest rates by 25 bps.

In absence of any major market moving releases, either from Canada or the US, the prevalent bullish sentiment surrounding oil prices might continue to lend support to the Canadian Dollar's strong bid tone and might restrict any sharp recovery for the major.

Technical levels to watch

From current levels, weakness below 1.3110 level (session low) is likely to drag the pair towards testing the very important 200-day SMA support near 1.3075 region below which a fresh leg of weakness would open room for further near-term depreciating move for the pair. On the upside, sustained recovery momentum above 1.3150 immediate hurdle is likely to lift the pair towards 1.3175 ahead of 100-day SMA resistance near 1.3195-1.3200 region.