USD/CAD in search of a firm direction, consolidates in a range below mid-1.2900s

   •  Softer US bond yields fail to assist the USD to build on overnight rebound.
   •  Goodish rebound in oil prices underpin Loonie and seemed to cap gains.

The USD/CAD pair struggled for a firm directional bias and seesawed between tepid gains/minor losses through the early European session on Tuesday.

The pair failed to build on overnight rebound from the 1.2900 handle, with a combination of factors leading to a range-bound price action within a narrow trading band below mid-1.2900s.

A goodish rebound in crude oil prices, amid expectations of a decline in the US inventories, underpinned demand for the commodity-linked currency - Loonie and kept a lid on any meaningful up-move for the major.

This coupled with a mildly weaker tone around the US Treasury bond yields, which did little to attract any follow-through US Dollar buying interest further collaborated to the pair's subdued price action on Tuesday. 

It would now be interesting to see if the pair continues finding support near the 1.2900 handle or extends last week's rejection slide from the key 1.30 psychological mark as traders now look forward to the release of US ISM non-manufacturing PMI for some fresh impetus. 

Technical levels to watch

The 1.2900 mark might continue to act as an immediate support, which if broken might turn the pair vulnerable to break below the 1.2875-70 intermediate support and head towards testing the 1.2820-15 region. 

On the flip side, momentum back above the 1.2960-65 region might continue to confront some fresh supply near the 1.30 handle, above which the pair is likely to aim towards retesting the 1.3040-45 supply zone.