USD/CAD back below 1.3100 handle, inching closer to weekly low

Having posted a session high near 1.3120 region, the USD/CAD pair ran through some fresh offers and has now drifted into negative territory for the second consecutive day.

Currently trading back below 1.3100 handle, around 1.3085 region, a fresh wave of US Dollar selling pressure during early European session dragged the pair back closer to previous session's sharp reversal swing lows. 

Uncertainty surrounding the US President Donald Trump's fiscal policies, which has been supportive of the US Dollar strength since the November election, continues to dampen expectations for an immediate Fed rate-hike move and weighing on the greenback across the board. 

Even a softer tone around oil markets, which tends to dent demand for the commodity-linked currency - Loonie, has failed to provide any immediate respite, albeit might lend some support closer to weekly lows near 1.3075 area. 

Friday's economic docket features the release of Canadian CPI figures, due later during NA session, and should provide fresh impetus for the pair's next leg of directional move. From the US, new home sales data and revised UoM Consumer Sentiment index might also help traders to grab some short-term trading opportunities.

Technical levels to watch

Immediate support on the downside is seen near 1.3080-75 region below which the pair is likely to head towards 1.3025 horizontal support ahead of 1.30 psychological mark. On the upside, sustained recovery above session peak resistance near 1.3120 level could get extended towards 200-day SMA hurdle near 1.3145-50 region. On a convincing move above 200-day SMA barrier, the pair seems all set to aim back towards reclaiming 1.3200 round figure mark.