The greenback selling pressure seems to have abated, helping the USD/CAD pair to stage a minor recovery from fresh 14-month lows.
Currently hovering just above mid-1.2600s, just a few pips away from session tops touched in the last hour, a modest pickup in the US Dollar demand helped the pair to bounce off lows. The up-move, however, seemed lacking strong conviction amid fading expectations of a Fed rate hike action in September.
Moreover, an uptick in crude oil prices, supported by today's stronger than expected Chinese macro data, was further seen lending support to the commodity-linked currency - Loonie and collaborated towards keeping a lid on any meaningful recovery for the major.
Moving ahead, today's releases of Empire State Manufacturing Index from the US and Foreign Securities Purchases data from Canada would now be looked upon for some short-term trading impetus.
However, investors' focus would remain glued to the latest Canadian inflation figures and retail sales data, due for release on Friday, which would now act as a key determinant of the pair's next leg of directional move.
Technical levels to watch
Immediate resistance is pegged near 1.2675 level, above which a bout of short-covering could lift the pair beyond the 1.2700 handle towards an important horizontal hurdle near 1.2745-50 region.
On the flip side, sustained weakness below 1.2640 level now seems to pave way for continuation of the pair's near-term downward trajectory towards 1.2580 intermediate support en-route the key 1.25 psychological mark.
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