USD/CAD struggles to build on Friday’s modest rebound, 1.29 capping gains

   •  Renewed trade worries prompt some fresh USD selling and weigh.
   •  Positive oil prices underpin Loonie and add to the downward pressure.
   •  This week’s important macro releases eyed for fresh directional impetus.

The USD/CAD pair struggled to build on Friday's modest recovery gains and remained capped below the 1.2900 handle at the start of a new trading week. 

China's decision to implemented retaliatory tariffs on food imports from the US revived fears of a possible trade war between the world's two largest economies and prompted some fresh US Dollar selling at the start of a new week/quarter. 

This coupled with a mildly positive sentiment around crude oil prices underpinned demand for the commodity-linked currency - Loonie and further collaborated towards exerting some downward pressure on the major.

Looking at the broader picture, the pair now seems to have entered a consolidation phase and has been oscillating within a narrow trading band over the past few days. Hence, it would be prudent to wait for a decisive break through the mentioned range before positioning for the pair's next leg of directional move.

This week's important macroeconomic releases, including the keenly watched monthly employment details from the US and Canada, could turn out to be next fundamental catalyst providing some fresh directional impetus. 

Technical levels to watch

Immediate support is pegged near the 1.2860 region, below which the pair could slide back towards the 1.2815-10 support area. On the upside, any up-move beyond the 1.2900 handle is likely to confront fresh supply near the 1.2935-40 zone, which if cleared could assist the pair to dart towards reclaiming the key 1.30 psychological mark.