• Subdued USD action prompts fresh selling.
• Bullish oil prices add to the downward pressure.
After yesterday's brief pause, the USD/CAD pair came under some renewed selling pressure and hangs closer to last week's over 3-month lows.
The pair did attempt a modest recovery on Monday and was being supported by a strong follow-through US Dollar buying interest backed by the recent hawkish comments from various FOMC members, suggesting at least three interest rate hikes in 2018.
The recovery move, however, was capped near mid-1.2500s following the release of Bank of Canada’s (BoC) optimistic business outlook survey, which supported the case for a January rate hike move and underpinned the Canadian Dollar, despite NAFTA risks.
Meanwhile, the ongoing bullish run-up in crude oil prices remained supportive for the commodity-linked Loonie and further collaborated towards keeping a lid on any meaningful recovery for the major.
Currently hovering around the 1.2400 handle, traders might now take cues from today's second-tier economic releases in what could be another lackluster trading session on Tuesday.
Technical levels to watch
Immediate support is pegged near the 1.2375 region and is closely followed by mid-1.2300s, below which the pair is likely to accelerate the fall towards testing sub-1.2300 level.
On the upside, the 1.2445-50 region might continue to cap any recovery attempts, which if cleared now seems to trigger a short-covering bounce even beyond the 1.25 psychological mark towards 1.2530-35 horizontal hurdle.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.