USD/CAD tumbles to fresh 10-month lows, now eyeing 1.29 mark

Having faced rejection around the key 1.30 psychological mark, the USD/CAD pair came under some renewed selling pressure and tumbled to fresh 10-month lows near 1.2930 region during early NA session.

The latest leg of sharp fall over the past hour or so could be attributed to some renewed buying interest around oil markets, with WTI crude oil jumping to fresh multi-week beyond the $47.00 handle, which boosted demand for the commodity-linked currency - Loonie.

Also collaborating to the downside was today's release of Markit Canada Manufacturing PMI, at 54.7 for June, marked the 16th consecutive month of expansion and signalled a solid improvement in overall business conditions. 

   •  BoC: The loonie takes flight - SocGen

Meanwhile, possibilities of some stops being triggered on a sustained break below 1.2960 level seem to have further aggravated the selling pressure, amid holiday-thinned liquidity conditions and dragged the pair to its lowest level since Sept. 9.

Traders even shrugged off a mildly positive sentiment surrounding the US Dollar, with oil price dynamics and domestic economic data turning out to be an exclusive driver of the Canadian Dollar upsurge on Tuesday.

Technical levels to watch

The ongoing momentum seems strong enough to continue dragging the pair towards the 1.2900 handle, below which a fresh leg of weakness would pave way for continuation of the downward trajectory further towards mid-1.2800s.

On the upside, any recovery attempts might now seem to confront resistance near 1.2960 level, above which the pair is likely to make a fresh attempt towards reclaiming the 1.30 handle.