USD/CAD extends overnight rejection slide from 200-DMA

   •  Subdued USD demand fails to lend any support. 
   •  Positive oil prices provide an additional boost to Loonie.
   •  This week’s important macro data eyed for directional impetus. 

The USD/CAD pair came under some fresh selling pressure on Wednesday and now reversed all of its previous session up-move. 

On Tuesday, the pair once again failed to sustain its strength beyond the 1.2900 handle and retreated from the 1.2915-20 supply zone after the closely watched tax-cut legislation was delayed due to some procedural hiccups. 

With the US Senate passing the tax-cut bill and sending it back to the House for a final vote, a subdued US Dollar price action kept exerting some downward pressure on the major. 

This coupled with prevailing bullish sentiment around crude oil prices underpinned the commodity-linked currency - Loonie and further collaborated to the pair's fall to the 1.2860-55 region during the early European session on Wednesday. 

Further downside, however, remained limited as investors preferred to stay on the sidelines ahead of this week's key macro data, which might provide some fresh directional impetus to the major.

Technical levels to watch

A follow-through retracement below mid-1.2800s now seems to drag the pair back towards the 1.2800 handle area en-route its next major support near the 1.2730 horizontal level.

On the flip side, any up-move beyond the 1.2900 handle might continue to confront fresh supply near the 1.2920 region (200-day SMA), above which the pair seems all set to aim towards conquering the key 1.30 psychological mark.