USD/CAD in search of a firm direction, ranging below 1.25 handle

The USD/CAD pair continued with its struggle to reclaim the key 1.25 psychological mark and extended its consolidative price action through the early European session.

A combination of diverging forces did little to provide any fresh impetus and the pair struggled for a firm directional bias at the start of a new trading week. 

The recent upsurge in the US Treasury bond yields helped ease the US government shutdown-led bearish pressure surrounding the US Dollar, at least for the time being, and was seen lending some support.

The positive effect, to some extent, seems to have been negated by the prevalent positive trading sentiment around crude oil prices, which was seen underpinning demand for the commodity-linked Loonie. 

Looking at the broader picture, the pair remains within its post-BOC broader trading range and hence, traders are likely to wait for a decisive move in either direction before initiating any fresh positions.

On the economic data front, the only scheduled release of Canadian wholesale sales might provide some short-term trading impetus later during the early NA session.

Technical levels to watch

Bulls would be eyeing for a sustained move beyond the 1.25 handle, above which the pair is likely to dart towards 1.2545 intermediate hurdle en-route 100-day SMA barrier near the 1.2585 region.

On the downside, any meaningful retracement is likely to find immediate support near the 1.2440 horizontal zone, which if broken could accelerate the fall back towards the 1.2400 handle.