USD/CAD surrenders early gains to mid-1.2900s, turns neutral

   •  An upward revision of the US GDP provides a minor lift.
   •  Surging oil prices underpin Loonie and capped additional gains.

The USD/CAD pair continued with its steady climb from an intraday low level of 1.2903 and refreshes session tops during the early North-American session.

A goodish pickup in the US Dollar demand helped the pair to rebound around 50-pips from low and snapped three consecutive days of losing streak. The positive momentum got a minor boost following an unexpected upward revision of the US Q2 GDP growth figures, now seen at 4.2% annualized pace as compared to 4.1% estimated earlier. 

This coupled with a slight disappointment from the Canadian current account data, coming in to show a deficit of $15.88 billion as compared to $15.20 anticipated, lifted the pair to an intraday high level of 1.2950. 

The uptick, however, lacked any strong follow-through and seems to have already run out of steam amid a sudden pickup in oil prices, which underpinned demand for the commodity-linked currency Loonie.

In fact, WTI crude oil is now up nearly 1% for the day, back above the $69.00/barrel mark, and was seen as the only factor keeping a lid on any further up-move for the major. 

It would now be interesting to see if the pair is able to regain positive traction or continues with the NAFTA optimism-led bearish slide as traders now look forward to the release of weekly EIA report on the US crude oil inventories for some fresh impetus.

Technical levels to watch

On a sustained move above the 1.2950-60 immediate hurdle, the pair is likely to aim towards reclaiming the key 1.30 psychological mark before eventually aiming towards 1.3035-40 supply zone. 

On the flip side, sustained weakness below the 1.2900 handle might now turn the pair vulnerable to extend its bearish trajectory towards testing the key 200-day SMA support, currently near mid-1.2800s.