USD/CAD pauses sell-off, regains 1.2900 ahead of Yellen, BOC

The USD/CAD pair is seen reversing a brief dip below 1.29 handle, although struggles to take on the recovery beyond the last amid rallying oil prices and weaker Treasury yields.

• USD/CAD: Attention turns towards central bankers

The major remains under mild bearish pressure so far this session, although stalls the downslide in tandem with the US dollar index, which measures the value of the greenback against its six major rivals.

However, the major looks vulnerable, as the resource-lined Loonie remains underpinned by a solid rally seen in oil prices, triggered by the US API crude inventory report that showed surprisingly larger-than expected drawdown in crude stockpiles.

Further, dovish Fedspeaks coupled with renewed US-Russia political drama, this time with Trump Jr., also continue to weigh negatively on the buck, keeping the downbeat tone intact around the pair.

Focus now shifts towards the Fed Chair Yellen’s testimony and BOC monetary policy decision due later today, which will provide fresh light on the divergent monetary policy outlooks between both North American economies.

• BOC rate decision: Sell the fact in CAD?

USD/CAD Technical levels                

The next resistance can be seen at 1.2950 (psychological levels), 1.2995 (Jul 7 high) and 1.3043 (Jun 29 high). Next support to the downside can be found at 1.2857 (psycho multi-month lows), 1.2823 (classic S3) and 1.2800 (round number).