USD/CAD fails near 200-DMA hurdle, Canadian retail sales in focus

   •  A modest USD retracement prompts some profit-taking.
   •  Weaker oil prices helped limit further downside.
   •  Canadian retail sales data eyed for fresh impetus.

The USD/CAD pair struggled to build on early strength to near two-month tops and has now retreated to 1.2680-75 region. 

The pair stalled its bullish trajectory just ahead of the very important 200-day SMA and was being weighed down by a modest US Dollar retracement. With investors looking past Wednesday hawkish FOMC meeting minutes, a softer tone surrounding the US Treasury bond yields, primarily led by reviving safe-haven demand, prompted some profit-taking off the USD bullish position and has been one of the key factors weighing on the major.

Meanwhile, weaker oil prices, with WTI crude oil trading with a daily loss of over 0.5%, did little to provide any additional boost to the commodity-linked currency - Loonie and helped limit deeper losses, at least for the time being.

Moving ahead, today's key focus would be on the monthly Canadian retail sales data, which along with the usual initial weekly jobless claims from the US would now be looked upon for some fresh impetus during the early NA session.

Technical levels to watch

Any subsequent weakness is likely to find support near 1.2650-45 area and is followed by 100-day SMA support near the 1.2620 region. On the upside, 1.2715-20 zone (200-day SMA) remains an immediate strong hurdle, which if conquered is likely to assist the pair to dart towards reclaiming the 1.2800 handle.