• The USD/CAD pair dipped slightly in the US session on Wednesday as oil prices rallied, but movements were restrained ahead of a potential Federal Reserve interest rate hike.
   
• The Fed is expected to raise interest rates for the second time in three months later on Wednesday, encouraged by strong monthly job gains and confidence that inflation is finally rising to its target.
   
• The Fed is scheduled to release its latest policy statement along with updated economic forecasts at 2 p.m. EDT (1800 GMT). Fed Chair Janet Yellen is due to hold a press conference half an hour later.
   
• Oil prices rose more than 1 percent Wednesday, lifted by a surprise drawdown in U.S. crude inventories and data from the International Energy Agency (IEA) suggesting OPEC cuts should create a crude deficit in the first half of 2017.
   
• The currency pair is trading around 1.3450 levels and it is set to advance further towards 1.3500 and 1.3550 in the short term.
   
• To the upside, immediate resistance can be seen at 1.3540, a break above will take the pair towards next resistance level at 1.3600.
   
• To the downside, strong support can be seen at 1.3432 levels, a break below will open the door towards next level at 1.3343.
  
  Resistance Levels
  
  R1: 1.3540 (38.2% Retracement level)
  
  R2: 1.3600 (Psychological levels)
  
  R3: 1.3662 (23.6% Retracement level)
  
  Support Levels
  
  S1: 1.3432 (50% Retracement level)
  
  S2: 1.3343 (61.8% Retracement level)
  
  S3: 1.3282 (March 1st lows)