USD/CAD slides to fresh session lows near 1.2460 level

The USD/CAD pair failed to build on early up-move to session high level of 1.2513 and has now drifted into negative territory.

Currently trading around the 1.2460-65 region, testing session lows, the pair has now eroded part of previous session's tepid recovery gains from 25-month lows and seems to have largely shrugged off a modest pickup in the US Dollar demand.

Even a consolidative action around crude oil prices, which drives demand for the commodity-linked currency - Loonie, failed to lend any support and clearly seems to indicate that the bearish trend is still very much intact amid deteriorating sentiment around the greenback.

Fading expectations of another Fed rate hike action in 2017 coupled with the US political turmoil has kept the greenback on the back foot and failed to assist the pair to register any meaningful recovery.

   •  US: Monetary policy outlook still no clearer - ING

Looking at the recent price action, the pair now seems to have entered a consolidation phase as investors look forward to a slew of important macro data, including the employment reports from Canada and the US (NFP), due on Friday.

In the meantime, today's US economic data - Personal Income/Spending data, Core PCE Price Index and ISM Manufacturing PMI, would now be looked upon for some short-term trading impetus.

Technical levels to watch

From current levels, 1.2420-15 area remains an immediate strong support to defend, which if broken would turn the pair vulnerable to extend the downfall towards 1.2345 intermediate support en-route the 1.2300 handle. On the flip side, any up-move back above the 1.25 handle, leading to a subsequent move beyond 1.2530 level might trigger a short-covering bounce towards the 1.2570-75 important horizontal barrier ahead of the 1.2600 handle.