USD/CAD retakes 1.25 mark and beyond amid notable USD demand

The USD/CAD pair caught some fresh bids near 50-day SMA on Monday and has now moved beyond the key 1.25 psychological mark, back closer to Friday's one-month tops.

The pair's latest leg of sharp up-move over the past hour or so could be solely attributed to stronger US Dollar buying interest. Growing prospects for additional Fed rate hike move and renewed optimism over US tax reforms remained supportive of the prevalent strong bullish sentiment around the greenback. 

Meanwhile, a modest pull-back in crude oil prices was also seen weighing on the commodity-linked currency - Loonie and further collaborated to the pair's strong up-move through early European session.

Currently placed at session tops, around the 1.2520 region, traders now look forward to today's economic docket, highlighting the release of US ISM manufacturing PMI print, for some fresh impetus.

Technical levels to watch

Bulls would be eyeing for a follow through buying interest beyond 1.2530-35 area, above which the pair is likely to aim towards reclaiming the 1.2600 handle before eventually moving towards 1.2620-25 horizontal resistance.

On the flip side, any retracement back below the 1.25 handle might continue to find immediate support near the 1.2460 region (50-day SMA), which if broken could accelerate the slide back towards 1.2425-20 strong horizontal support.