USD/CAD hits fresh 4-week tops, nearing 1.26 mark

   •  USD continues gaining some positive traction. 
   •  Weaker oil prices further support the up-move.
   •  Bulls now eye to conquer 200-DMA hurdle.

After an initial dip to mid-1.2500s, the USD/CAD pair regained traction and was now seen building on previous session's strong gains.

Against the backdrop of last week's upbeat NFP report, which reaffirmed market expectations for gradual Fed monetary policy tightening cycle through 2018, the US Dollar got an additional boost after the US lawmakers reached a two-year budget agreement. 

Adding to this, a sharp drop in oil prices weighed heavily on the commodity-linked currency - Loonie and further collaborated to the pair's upsurge, to 4-week tops on Wednesday. 

With WTI crude oil still nursing overnight slump, a follow-through US Dollar buying interest remained supportive of the pair's up-move to the 1.2580 region, the highest since January 11.

It would now be interesting to see if bulls are able to maintain their dominant position and assist the pair to move back above the very important 200-day SMA barrier, near the 1.2600-1.2605 region, which has been acting as a stiff resistance since the beginning of 2018.

Today's economic docket featuring the release of Canadian New Housing Price Index (NHPI) and the usual weekly jobless claims data from the US might provide some trading opportunities ahead of scheduled remarks by the BOC Senior Deputy Governor Carolyn Wilkins.

Technical levels to watch

Bulls would be eyeing for a clear breakthrough 200-DMA barrier, above which the pair is likely o accelerate he up-move towards 1.2670 horizontal resistance. On the flip side, any meaningful retracement below mid-1.2500s is likely o find fresh buying interest near the 1.2500-1.2490 region and should continue o ac as an important base in the near-term.