USD/CAD falls to near 8-week lows, bulls trying to defend 100-DMA support

   •  A modest USD retracement exerts some downward pressure on Tuesday.
   •  Bullish crude oil prices underpin Loonie and add to the selling bias.
   •  Technical selling to emerge below 100-DMA and accelerate the downfall.

The USD/CAD pair met with some fresh supply on Tuesday and has now dropped back to the very important 100-day SMA support.

The pair's attempted recovery move at the start of a new trading week met with some fresh supply near the 1.3040 level, with a modest US Dollar retracement exerting some additional downward pressure through the early European session on Tuesday.

Adding to this, a follow-through positive momentum around crude oil prices underpinned the commodity-linked currency - Loonie and further collaborated to the pair's slide to an intraday low level of 1.2965, or near eight-week lows.

It would now be interesting to see if the pair continues finding some support at current levels or a follow-through selling pressure confirms a bearish breakdown and opens room for a fresh leg of near-term downfall. 

Traders now look forward to the second-tier economic data - Canadian Ivey PMI and JOLTS Job Openings data from the US, in order to grab some short-term opportunities. 

Meanwhile, the biggest data point of the week will be the US consumer inflation figures, which along with monthly Canadian jobs report on Friday will play a key role in determining the pair's near-term trajectory.

Technical levels to watch

A follow-through selling has the potential to continue dragging the pair further towards 1.2930 intermediate support en-route the 1.2900 round figure mark. On the flip side, the key 1.30 psychological mark might now hinder any immediate recovery attempt and is followed by resistance near the 1.3035-40 region.