USD/CAD fails to extend recovery move beyond 1.30 handle, US ISM awaited

The USD/CAD pair stalled its up-move just ahead of the key 1.30 psychological mark and trimmed some of its recovery gains from 5-month lows touched on Friday.

The pair struggled to gain any strong follow through traction despite a broad based US Dollar recovery move and a minor retracement in oil prices, which tends to weigh on the commodity-linked currency - Loonie. WTI crude oil retreated from nearly three-week tops but failed to provide any fresh bullish impetus for the major. 

Meanwhile, the Canadian Dollar remained underpinned by the recent hawkish BoC rhetoric, making it clear that the central bank is considering an interest rate-hike sooner rather than later, and further collaborated towards keeping a lid on the pair's recovery move at the start of a new trading week.

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It would now be interesting to see if the pair is able to build on the tepid recovery move or the current bounce would be utilized to initiate fresh short positions amid growing skepticism over the US President Donald Trump's ability to push through pro-growth economic politics. 

Next in tap would be the release of US ISM manufacturing PMI, which would be looked upon for some short-term trading opportunities during early NA session.

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Technical levels to watch

Currently trading around 1.2980 level, the 1.30 handle remains an immediate strong hurdle, which if conquered might trigger a short-covering rally towards 1.3070-75 horizontal resistance ahead of the 1.3100 handle.

Conversely, retracement back below 1.2960 level would turn the pair vulnerable to accelerate the slide towards 1.2925 intermediate support en-route the 1.2900 handle.