USD/CAD bulls manage to defend 1.30 handle, at least for now

   •  Stalls overnight sharp slide and finds some support amid renewed USD buying interest.
   •  A follow-through weakness in oil prices weigh on Loonie and extend additional support.

The USD/CAD pair extended overnight sharp retracement slide from two-week tops and dropped to the key 1.3000 psychological mark, albeit seems to have found some support.

On Wednesday, sentiment around the Canadian Dollar deterioration on news that Saudi Arabia instructed overseas asset managers to sell-off their Canadian equity, bond and cash holdings. Following the headlines, the pair rallied hard and spiked beyond the 1.3100 handle, albeit the momentum quickly ran out of steam.

The pair retreated around 115-pips from an intraday high level of 1.3120 and seemed largely unaffected by a steep decline in crude oil prices, which tends to dampen demand for the commodity-linked currency - Loonie. 

The pair kept losing ground through the Asian session but now seems to have found some support amid renewed US Dollar buying interest over the past hour or so. This coupled with a follow-through weakness in oil prices helped the pair to rebound around 20-pips from session lows. 

It would now be interesting to see if the pair is able to build on the uptick or meets with some fresh supply at higher levels as traders now look forward to the economic data - Canadian New Housing Price Index (NHPI) and the US Producer Price Index (PPI), for some fresh impetus.

Technical levels to watch

Any subsequent up-move is likely to confront immediate resistance near mid-1.3000s, above which the pair is likely to aim back towards reclaiming the 1.3100 handle. On the flip side, sustained weakness back below the 1.30 handle might turn the pair vulnerable to head back towards challenging 100-day SMA support, currently near the 1.2965 region.