The USD/CAD pair built on the previous day's strong move up and gained some follow-through traction for the second consecutive session on Wednesday. The momentum pushed the pair further beyond the 1.2600 round-figure mark, to one-week tops during the early European session. The US dollar staged a modest bounce from two-week lows, which, in turn, was seen as one of the key factor driving the USD/CAD pair higher. Bulls seemed rather unaffected by a positive tone around crude oil prices, which tend to underpin demand for the commodity-linked loonie.
From a technical perspective, the USD/CAD pair has now moved closer to a resistance marked by the top boundary of a four-month-old descending channel. The mentioned barrier is pegged near the 1.2625-30 area, which if cleared decisively will mark a near-term bullish breakout. On the flip side, any meaningful pullback below the 1.2600 mark might attract some dip-buying and remain limited near the 1.2575-70 area. Sustained weakness below will negate the positive bias and turn the USD/CAD pair vulnerable to retest the key 1.2500 psychological mark.