USD/CAD flirting with lows, headed back towards 1.23 mark

   •  Renewed USD weakness prompts fresh selling.
   •  Weaker oil prices lend some support.
   •  Traders eye US data for short-term impetus.

The USD/CAD pair erased early gains to the 1.2380 area and is currently placed at the lower end of its daily trading range, around the 1.2315-10 region. 

Despite a good two-way move, the pair lacked any firm directional bias and remained confined within a four-day-old trading range. A combination of diverging forces failed to provide any fresh impetus and has led to a range-bounce price action.

A fresh wave of US Dollar selling bias, triggered by a sharp retracement in the US Treasury bond yields kept a lid on any meaningful up-move. The negative factor, to some extent, was negated by retracing crude oil prices, which was seen weighing on the commodity-linked - Loonie and helped limit any deeper losses, at least for the time being.

Traders now look forward to the US economic docket, highlighting the release of Conference Board's Consumer Confidence Index, for some fresh trading impetus. Investors' focus, however, will remain glued to the US President Donald Trump's first official State of the Union address and the highly anticipated FOMC decision, which would help determine the pair's near-term trajectory. 

Technical levels to watch

A convincing break through the 1.2300 handle is likely to accelerate the fall further towards 1.2255-50 support area en-route the 1.2200 round figure mark. On the flip side, any up-move beyond 1.2335 immediate resistance might continue to confront fresh supply near the 1.2380-85 region ahead of the 1.2400 handle.