USD/CAD recovers early lost ground, eyeing a move beyond 1.26 handle

   •  Subdued USD demand fails to help register any meaningful recovery.
   •  Bullish oil prices underpin Loonie and further seemed to cap gains.

The USD/CAD pair recovered early lost ground, back closer to Wednesday's near 1-month lows, albeit struggled to move back above the 1.2600 handle.

The pair did catch some bids during the early NA session and retested session high level of 1.2594. The uptick, however, lacked strong conviction and any follow-through amid subdued US Dollar demand. 

A larger than expected retracement in the Prelim UoM Consumer Sentiment Index, coming in at 97.8 for April as compared to previous month's downwardly revised reading of 101.4, did little to provide any boost to the greenback.

Adding to this some renewed buying around crude oil prices, which tends to underpin demand for the commodity-linked currency - Loonie, further collaborated towards keeping a lid on any meaningful up-move for the major.

With today's second-tier US economic releases out of the way, the USD/oil price dynamics might continue to provide some short-term trading opportunities on the last trading day of the week. 

Technical levels to watch

On a sustained move beyond the 1.2600 handle, the pair seems to aim towards challenging the very important 200-day SMA support-turned-resistance near the 1.2630 region. On the flip side, mid-1.2500s might continue to act as an immediate support, which if broken might turn the pair vulnerable to slide further towards testing the key 1.2500 psychological mark.