USD/CAD flirting with 1.27 handle ahead of macro data

   •  Thursday’s upbeat Canadian data continues to weigh. 
   •  Reviving USD demand fails to lend any support.
   •  Today’s economic data eyed for fresh impetus. 

The greenback held weaker against its Canadian counterpart, with the USD/CAD pair flirting with 2-1/2 week lows ahead of important macro releases. 

Thursday's solid Canadian economic reports continued to underpin the domestic currency and helped offset a modest US Dollar uptick. Traders also seemed to have ignored a mildly negative trading sentiment around crude oil prices, which tends to weigh on commodity-linked Loonie. 

The pair, however, now seems to have found some support near the 1.2700 handle as investors now look forward to the important release of monthly Canadian GDP growth figures for the month of Oct. 

Against the backdrop of rising inflationary pressure, a better-than-expected reading would reinforce market expectations for an eventual BOC rate hike move in January and continue exerting downward pressure on the pair. 

From the US, the release of durable goods orders and the Fed's preferred inflation gauge - core PCE price index would also influence the pair's momentum amid pre-holiday thin trading conditions.

Technical levels to watch

A convincing break through the 1.2700 handle now seems to pave the way for an extension of the pair's downward trajectory towards 100-day SMA support near the 1.2600 mark with some intermediate support near the 1.2665-0 region.

On the upside, mid-1.2700s now becomes an immediate resistance, which if cleared might trigger a short-covering bounce towards the 1.2800 handle before the pair eventually aims to test 1.2825-30 supply zone.