USD/CAD fails to extend yesterday's strong up-surge, capped below 1.3200 handle

The USD/CAD pair struggled to extend early Asian session up-move to 1.3200 neighborhood and has now drifted into negative territory to a fresh session low near 1.3170 region.

A fresh leg of slide in the US treasury bond yields undermined the US Dollar demand and failed to assist the pair to build on previous session's strong up-surge back above the very important 200-day SMA. The pair on Monday jumped nearly 100-pips from session low after Dallas Fed President Kaplan’s hawkish comments, which increased bets of a rate hike action at the Fed's next monetary policy meeting in March. 

Meanwhile, a positive trading sentiment around oil markets, with WTI crude oil placed comfortably above $54.00/barrel mark, was seen lending additional support to the commodity-linked currency - Loonie, and collaborated to the pair's slide during early European session.

Investors on Tuesday would remain focused on the US President Donald Trump's first address to Congress, where details about Trump’s proposed reforms would be the next big trigger determining the pair's next leg of directional move. On the economic data front, the preliminary (second estimate) US GDP growth numbers for the fourth-quarter of 2016, followed by Chicago PMI and CB Consumer Confidence index, would also be looked upon for short-term trading impetus during NA session.

Technical levels to watch

A follow through retracement below 1.3165-60 area could get extended towards 200-day SMA support near 1.3145 region, below which the pair is likely to head back towards 1.3100 round figure mark. On the upside, 50-day SMA near 1.3200-05 region might continue to act as immediate hurdle, which if cleared has the potential to lift the pair towards 100-day SMA resistance near 1.3270-75 region.