USD/CAD Price Analysis: Oscillates in a range above the 1.3220 mark ahead of FOMC

• USD/CAD remains confined in a narrow trading band around 1.3220.
• USD/CAD holds above the 50- and 100-hour EMAs, which means further upside looks favorable.
• The pair will meet the immediate resistance level of 1.3230; 1.3200 is a critical support level.

The USD/CAD pair oscillates in a narrow trading band near 1.3220 heading into the European session on Monday. In response to Friday's release of Canadian Retail Sales, the Loonie declines against the US Dollar. During the busy week of economic data, market participants remain on the sidelines, awaiting the Federal Reserve's (Fed) interest rate announcement for fresh impetus for the USD/CAD pair.

Meanwhile, the renewed tension between Russia and Ukraine might further tighten oil supplies. This, in turn, might cap the upside in the USD/CAD pair and lift the commodity-linked Loonie.

From the technical perspective, USD/CAD holds above the 50- and 100-hour Exponential Moving Averages (EMA), which means further upside looks favorable.

Therefore, the major pair could meet the immediate resistance level of 1.3230 (High of July 24) en route to 1.3245 (High of July 18). The 1.3290–1.3300 zone appears to be a tough nut to crack for USD/JPY. Any meaningful follow-through buying above the latter will see a rally to the next barrier at 1.3320 (High of June 14).

That said, the Relative Strength Index (RSI) stands above 50, within bullish territory, suggesting that buyers are likely to retain control in the near term.

Looking at the downside, any extended weakness below the 1.3200 mark will challenge the next contention at 1.3185 (the 100-hour EMA). Further south, the pair will see a drop to 1.3150 (Low of July 21).

USD/CAD one-hour chart