USD/CAD bounces off 1.2900 handle, still weak below 100-DMA

Despite of a broad retracement in crude oil prices, the USD/CAD pair maintained its offered tone and is now trading at the lower band of the daily trading range.

Currently trading around 1.2925 level, a six-day low, the pair extended reversal for third consecutive day from last week's multi-week high level of 1.3148 touched a day prior to the release of much-awaited US monthly jobs report on Friday. 

The intense selling pressure surrounding the major dragged the pair below 100-day SMA support and hence, a follow through weakness below 1.2900 handle would open room for further near-term downward trajectory.

Looking ahead, a holiday in the US and Canadian markets (in observance of Labor Day), trading action is likely to remain subdued with negative bias amid the prevalent buoyant sentiment surrounding crude oil prices. 

Technical levels to watch

On the immediate downside, 1.2900 handle remains immediate support below which the pair is likely to immediately drift towards 1.2860-50 important support. Meanwhile on the upside, recovery momentum back above 100-day SMA resistance near 1.2935-40 region is likely to trigger a minor short-covering bounce back towards session high resistance near 1.2995-1.3000 psychological mark.