USD/CAD remains capped below 1.2800 handle

   •  Stable oil prices underpin commodity-linked Loonie.
   •  Renewed uptick in US bond yields helps limit downside.
   •  Today’s economic data eyed for fresh impetus.

The USD/CAD pair once again failed to clear the 1.2785-90 immediate hurdle and quickly retreated around 25-pips from session tops, touched in the last hour.

Currently trading around the 1.2760 region, the pair seemed lacking any strong follow-through and struggled to build on overnight gains. A combination of diverging forces has failed to provide any impetus, with investors waiting for today's economic data for fresh direction.

A goodish pickup in the US Treasury bond yields, especially after yesterday's solid inflation and retail sales data that reaffirmed December Fed rate hike expectations extended some support to the US Dollar. 

The positive effect, however, was simultaneously negated by some signs of stability in crude oil prices, which was seen benefitting the commodity-linked currency - Loonie and has eventually led to a subdued price action on Thursday.

Moving ahead, traders would now take cues from today's economic docket, featuring the releases of manufacturing data from the US and Canada, along with the first Canadian ADP employment report.

Technical levels to watch

From current levels, 1.2735 level is likely to act as immediate support, which if broken could drag the pair back towards the 1.2700 handle. On the upside, momentum above 1.2785-90 hurdle could get extended towards 1.2845 intermediate resistance en-route 1.2890-1.2900 strong barrier.