USD/CAD falls back below 1.2700 handle
• Renewed USD weakness prompts fresh selling.
• Weaker oil prices helping limit deeper losses.
• New home sales data and Fedspeaks eyed for fresh impetus.
Having posted a session high level of 1.2723, the USD/CAD pair turned lower sharply and has now dropped below the 1.2700 handle.
A fresh wave of US Dollar selling pressure emerged during the early European session and dragged the pair back closer to two-week lows, touched last Thursday.
Last week's dovish FOMC meeting minutes, raising doubts over the pace of Fed's monetary policy tightening cycle post-December kept the USD bulls on the defensive and has been one of the key factors weighing on the major.
Meanwhile, a softer tone around oil markets, with WTI crude oil prices easing from 2-1/2 year tops failed to provide any additional boost to the commodity-linked currency - Loonie and might now contribute towards limiting any deeper losses, at least for the time being.
Later in the day, the release of new home sales data from the US, followed by Fedspeaks would now be looked upon for some fresh impetus ahead of this week's important market moving economic releases.
Technical levels to watch
Immediate support is pegged near 1.2670-65 area, below which the pair could be headed towards retesting the 1.2600 handle before eventually dropping to 100-day SMA support, near the 1.2565 region.
On the upside, 1.2725-30 zone now becomes an immediate hurdle, which if cleared might trigger a short-covering bounce towards 1.2770 horizontal resistance en-route the 1.2800 handle and 1.2820 supply zone.