USD/CAD struggles to gain traction, holds weaker around 1.23 handle

The USD/CAD pair struggled to build on overnight recovery move from fresh 4-month lows and slipped back below the 1.2300 handle in the last hour. 

The pair's post-FOMC rebound faced rejection at 100-hourly SMA and was being weighed down by some renewed US Dollar weakness, despite a follow-through upsurge in the US Treasury bond yields. 

Moreover, yesterday's mostly in-line Canadian GDP figures were also seen underpinning the domestic currency and contributed to the pair's weaker tone through the early European session. 

Adding to this, a fresh leg of up-move in crude oil prices was further seen benefitting the commodity-linked currency - Loonie and might now cap any meaningful up-move, at least for the time being.

Moving ahead, today's economic docket, highlighting the release of key manufacturing PMIs, should now provide some fresh impetus later during the early NA session.

Technical levels to watch

On a sustained weakness below the 1.2300 handle, the pair is likely to head back towards challenging mid-1.2200s before eventually dropping to the 1.2200-1.2180 strong horizontal support.

Meanwhile, on the upside, any meaningful recovery move is likely to confront fresh supply near 1.2335 level, above which a bout of short-covering could lift the pair towards 1.2375-80 supply zone ahead of the 1.2400 handle.