USD/CAD surrenders tepid recovery gains ahead of data

The USD/CAD pair failed to build on its tepid recovery move and has now retreated back to the lower end of the daily trading range, around 1.2630-25 region.

Lack of any strong follow through US Dollar demand failed to assist the pair to build on early up-move to mid-1.2600s. Adding to this, a fresh leg of up-move in crude oil prices, which was seen lending support to the commodity-linked currency - Loonie, further collaborated towards keeping a lid on the pair's tepid recovery move. 

Meanwhile, a modest pickup in the US Treasury bond yields has been the only factor limiting further downslide, with the pair holding above the 1.2600 handle at least for the time being. 

Today's economic docket features the release of housing market data from the US and Canadian manufacturing sales, which would be looked upon for fresh impetus during early NA session.

From a technical perspective, persistent selling bias on every recovery attempts clearly seems to suggest that the pair's near-term bearish trajectory might still be far from over. However, it would prudent to wait for a sustained weakness back below the 1.2600 handle before positioning for any additional downside amid near-term oversold conditions.

Technical levels to watch

Bears would be eyeing for a decisive break through the mentioned handle, below which the pair is likely to accelerate the fall towards 1.2535-30 intermediate support ahead of the key 1.25 psychological mark.

On the upside, sustained recovery beyond mid-1.2600s could get extended towards reclaiming the 1.2700 handle, above which a fresh bout of short-covering has the potential to continue lifting the pair further towards 1.2760-70 resistance area.