USD/CAD flirting with multi-month lows, back below 1.25 mark

The USD/CAD pair struggled to register any meaningful recovery and is now headed back to 14-month lows touched in the previous session.

Currently trading marginally below the 1.2500 psychological mark, the pair is being weighed down by a sharp upsurge in crude oil prices. In fact, WTI crude oil traded with strong gains above $47.00 mark and was seen extending support to the commodity-linked currency - Loonie.

   •  CAD remains firm - BBH

Meanwhile, the market seems to have largely shrugged off a sharp recovery in the US Treasury bond yields, with the latest US political jitters restricting any immediate US Dollar recovery and held the pair in negative territory for the sixth consecutive session.

Against the backdrop of persistent USD selling bias, traders now look forward to the release of CB Consumer Confidence Index from the US for some immediate respite. However, the key focus would remain on Wednesday's FOMC decision, which should act as a key determinant of the pair's next leg of directional move.

Technical levels to watch

A follow through weakness below 1.2485-80 zone, leading to a subsequent break below May 2016 lows support near 1.2460 level, might continue dragging the pair further towards the 1.2400 handle. On the upside, any recovery attempts might continue to confront fresh supply near mid-1.2500s, above which a bout of short-covering could lift the pair towards the 1.2600 mark en-route 1.2635-40 hurdle.