USD/CAD off lows, but remains below 1.27 handle; over 1-month lows

   •  BoC business outlook survey prompts some aggressive selling on Monday.
   •  Positive NAFTA news/bullish oil prices further support Canadian Dollar.

The USD/CAD pair extended overnight sharp retracement slide and retreated farther below the 1.2700 handle to fresh 6-week lows.

On Monday, the pair retreated from an intraday high level of 1.2819 and tumbled over 125-pips following the release of BoC's business outlook survey, which showed that Canadian companies remain upbeat about the future despite rising trade tensions. 

This coupled with positive news over higher chances of a new NAFTA deal by the first week of May provided an additional boost to the Canadian Dollar and further collaborated to the pair's bearish break below 50-day SMA support.

The pair kept losing ground and was further weighed down by bullish crude oil prices, which tends to underpin demand for the commodity-linked currency - Loonie. The pair has now slipped below 100-day SMA, with a follow-through weakness, led by some fresh technical selling below an important moving average, now looks a distinct possibility.

Today's economic docket, featuring the release of Canadian building permits and the latest US PPI figures would now be looked upon for some fresh trading impetus later during the early NA session.

Technical levels to watch

Any subsequent fall is likely to find support near the very important 200-day SMA, currently near the 1.2635 region, below which the pair is likely to fall further towards the 1.2600 handle. On the flip side, any meaningful recovery attempts beyond the 1.2700 handle could get extended but is likely to be capped near mid-1.2700s supply zone.