USD/CAD holds gains above 1.2400 amid WTI sell-off, Fed eyed

• USD/CAD holds a two-day uptrend amid a pause in the USD advance.
• WTI slips on a weekly build in the US crude stockpiles, cautious mood.
• All eyes on the Fed decision, US economic data also remain in focus.

USD/CAD is holding the higher ground above 1.2400, flirting with four-day tops near 1.2425, as the bulls cheer the sell-off in WTI prices ahead of the critical US events.

The bullish undertone in the major can be associated with the sell-off in WTI prices, in the face of a weekly climb in the US crude inventories, per the American Petroleum Institute’s (API) latest data. The API data showed that US crude supplies rose by 3.6 million barrels for the week ended Oct. 29.

On the other side, a pause in the US dollar’s rebound is making it an uphill battle for the USD/CAD bulls to extend the further upside. The dollar bulls turn on the sidelines ahead of the all-important Fed decision, with tapering on the cards.

Although it’s the Fed’s outlook on the interest rates and inflation that will be crucial for the financial markets in the coming months. Meanwhile, the sentiment in the oil market will also play a crucial part in the loonie’s performance, as investors eagerly await the OPEC+ meeting on Thursday.

In the meantime, the US ADP and ISM Services PMI will offer fresh trading impulse to the pair, as traders gear up for the Fed decision.

USD/CAD: Technical levels to watch out