USD/CAD erases overnight recovery gains, back around 1.29 handle

   •  Renewed USD selling fails to assist build on overnight rebound.
   •  Bullish oil prices underpin demand for the commodity-linked Loonie.
   •  Canadian macro releases/US durable goods eyed for fresh impetus.

The USD/CAD pair came under some renewed selling pressure on Friday and has now reversed a major part of previous session's recovery gains from 1-1/2 week lows.

A fresh wave of US Dollar selling pressure, triggered by the US President Donald Trump's announcement of new tariffs targeting China, failed to assist the pair to recover further beyond mid-1.2900s. 

Adding to this, news that the Trump administration has issued tariff exemptions for some of its allies, including Canada, and the prevailing bullish sentiment around crude oil prices underpinned the Canadian Dollar and further collaborated to the pair's offered tone.

The pair has now slipped back closer to the 1.2900 handle as the focus now shifts to Canadian macro releases - the latest consumer inflation figures and monthly retails sales, which along with the US durable goods orders should provide some fresh impetus on the last trading day of the week. 

Technical levels to watch

Sustained weakness back below the 1.2900 mark could drag the pair back towards retesting 1.2835-30 intermediate support en-route the 1.2800 round figure mark. On the upside, 1.2940-50 area now seems to act as an immediate resistance, above which a fresh bout of short-covering has the potential to lift the pair back above the key 1.30 psychological mark towards its next major hurdle near the 1.3045-50 region.