USD/CAD holds weaker below mid-1.2800s

   •  Softer USD/positive oil prices prompt fresh selling. 
   •  US PPI print eyed for fresh trading impetus. 

The USD/CAD pair continued with its struggle to gain any strong follow through traction beyond mid-1.2800s and came under some fresh selling pressure on Tuesday.

Currently trading around the 1.2835 region, the pair is now just a few pips away from previous session's low and was being weighed down by a mildly softer tone around the US Dollar. 

Meanwhile, the prevalent bullish sentiment around oil markets, with WTI crude oil holding comfortably above the $58.00/barrel mark, underpinned the commodity-linked currency - Loonie and further collaborated to the pair's retracement through the early European session on Tuesday.

It, however, remains to be seen if the pair is able to break through its three-day old trading range as investors might now refrain from placing aggressive bets ahead of the highly anticipated FOMC announcement on Wednesday.

In the meantime, oil price-dynamics, along with today's release of US PPI print would be looked upon to grab some short-term trading opportunities.

Technical levels to watch

A follow through weakness below 1.2830 level is likely to get extended towards the 1.2800 handle, below which the pair is likely to accelerate the fall towards 1.2765 horizontal support. On the upside, sustained move beyond mid-1.2800s now seems to lift the pair back towards the 1.2900 handle en-route 1.2915-20 supply zone.