USD/CAD stages a minor recovery from 5-month lows, eyeing to reclaim 1.30 mark

The USD/CAD pair snapped five consecutive days of losing streak and staged a minor recovery to reverse major part of Friday's slide to 5-month lows.

A modest pick-up in the US Dollar demand remained key theme through early European session at the start of a new trading week and has been one of the key factors that could be attributed to the pair's recovery back closer to the key 1.30 psychological mark. 

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Bulls, however, seemed lacking conviction amid the ongoing recovery in oil prices, with WTI crude oil holding on with gains above $46.00 handle and lending some support to the commodity-linked currency - Loonie. 

Meanwhile, the sentiment surrounding the Canadian Dollar has turned highly bullish in wake of the recent hawkish BoC rhetoric, pointing to a possibility of a rate hike sooner rather than later. Hence, it would be prudent to wait for a strong follow through buying interest before confirming that the pair might have bottomed out in the near-term.

Later during the NA session, the release of US ISM manufacturing PMI would now be looked upon for some fresh trading impetus. 

Technical levels to watch

On a sustained recovery back above the 1.30 handle, a fresh bout of short-covering could lift the pair towards 1.3070 resistance area en-route the 1.3100 round figure mark. On the downside, 1.2965 level now seems to act as immediate support, which if broken would turn the pair vulnerable to aim towards testing the 1.29 handle.