USD/CAD in search of a firm direction, holds above 1.25 mark ahead of data

The USD/CAD pair struggled for a firm direction and seesawed between tepid gains/minor losses just above the 1.25 handle. 

A combination of diverging forces, ranging from a strong follow through US Dollar buying interest and rising crude oil prices, have failed to provide any fresh impetus to the major. 

Surging US Treasury bond yields, amid speculation that the US President Donald Trump could pick a more hawkish candidate as the next Fed Chair, underpinned the greenback demand and has helped limit any immediate downside.

However, the prevalent bullish sentiment around oil markets, with WTI crude oil placed at its strongest level in around three weeks, was seen extending support to the commodity-linked currency - Loonie and has eventually led to an uneventful day for the major.

Traders might now take cues from today's economic docket, featuring the release of Canadian Manufacturing Sales, along with the release of US housing market data and followed by US crude oil inventories. Ahead of the economic data, Fedspeaks would also be looked upon to grab some short-term trading opportunities. 

Technical levels to watch

Immediate resistance is pegged near mid-1.2500s, above which the pair is likely to challenge 1.2590-1.2600 supply zone before eventually darting towards 100-day SMA barrier near the 1.2700 handle. 

On the flip side, sustained weakness below the 1.25 handle could get extended towards 1.2465-60  support, which if broken could accelerate the fall towards 1.2420 level en-route the 1.2400 round figure mark.