USD/CAD surges over 100-pips, retakes 1.2900 mark and beyond

   •  USD bullish run remains uninterrupted post-US data. 
   •  CAD further weighed down by renewed NAFTA concerns.

The USD/CAD pair rallied over 100-pips during the early NA session and is now looking to build on its momentum back above the 1.2900 handle.

The pair caught some strong bids and pierced through 50-day SMA barrier amid a strong follow-through US Dollar buying interest. Against the backdrop of resurgent US Treasury bond yields, the buck got an additional boost following the release of better-than-expected Empire State manufacturing index and an upward revision of retail sales figures for March, offsetting slightly weaker data for April.

The bullish momentum accelerated further after Mexico's Economy Minister Ildefonso Guajardo was noted saying that he does not see NAFTA deal before May 17, which prompted some aggressive selling around the Canadian Dollar.

Meanwhile, the market seems to have largely negated the prevalent bullish sentiment surrounding crude oil prices, which tends to underpin demand for the commodity-linked currency - Loonie, with the USD and renewed NAFTA concerns acting key determinants of the pair's strong upsurge to multi-day tops.

Technical levels to watch

Any subsequent up-move is likely to confront resistance near the 1.2940-45 region, above which the pair seems all set to extend the bullish momentum towards reclaiming the key 1.30 psychological mark. On the flip side, the pair now seems to find immediate support near mid-1.2800s, which if broken might prompt some fresh selling and drag it back towards retesting the 1.2800 round figure mark.