USD/CAD struggling to defend 1.24 mark

The USD/CAD pair came under some renewed selling pressure on Tuesday and eroded major part of previous session's modest recovery gains from 26-month lows.

Currently hovering around the 1.2400 handle, the pair has struggled to gain any immediate respite and hangs closer to the lowest level since June 2015 amid persistent US Dollar selling bias.

Escalating geopolitical tensions on reports that N. Korea could conduct more nuclear missile tests continued weighing on the greenback and has been one of the key factors weighing on the major. 

Adding to this, a mildly positive trading bias around crude oil prices further underpinned the commodity-linked currency - Loonie and also contributed to the pair's offered tone. 

Against the backdrop of recent strong Canadian GDP growth numbers, growing market expectations that BoC would raise interest rates, sooner rather than later, might continue to support the Canadian Dollar and restrict any immediate swift recovery for the major. 

   •  USD/CAD: rates to rise sooner than later - Nomura

Later during the NA session, the release of US factory orders data and speeches from various FOMC would now be looked upon for some fresh impetus ahead of the BoC monetary policy decision on Wednesday. 

Technical levels to watch

Renewed weakness below 1.2375-70 area could get extended back towards 1.2340 level (Friday's low) before the pair eventually drops to the 1.2300 handle. 

On the upside, sustained recovery beyond 1.2420 level could trigger a short-covering bounce and lift the pair towards 1.2455-60 horizontal resistance en-route the 1.25 psychological mark.