USD/CAD retreats from 9-month tops, back below 1.31 handle

   •  A modest USD retracement prompts some profit-taking move. 
   •  Weaker oil prices help limit immediate sharp downslide.
   •  Focus remains on the highly anticipated FOMC decision.

The USD/CAD pair surrendered early gains to 9-month tops and dropped to fresh session lows in the last hour, back below the 1.3100 handle. 

Despite a goodish pickup in the US Treasury bond yields, the US Dollar struggled to preserve early modest gains and was seen as one of the key factors prompting some profit-taking at higher levels. 

The pair retreated around 45-pips from an intraday high level of 1.3125 but lacked any follow-through selling amid the prevalent weaker tone around crude oil prices, which tends to undermine demand for the commodity-linked currency - Loonie. 

It would now be interesting to see if bulls are able to regain control or traders opt to lighten their bets as the focus now shifts the highly anticipated FOMC decision, which would drive the greenback in the near-term and eventually provide some fresh directional impetus.

Technical levels to watch

Any subsequent weakness is likely to find support near mid-1.3000s before the pair eventually drops to retest the key 1.30 psychological mark. On the flip side, sustained momentum back above the 1.3100 handle, leading to a subsequent strength beyond 1.3125 level, now seems to pave the way for a continuation of the pair's bullish momentum further towards 1.3160-70 intermediate resistance en-route the 1.3200 handle.