USD/CAD refreshes session low amid a modest USD pullback, bullish Oil prices

• A sharp intraday USD pullback exerts some downward pressure in the last hour.
• Bullish Oil prices further underpinned Loonie and collaborated to the downtick.
• The downside is likely to remain limited amid tempered Fed rate cut expectations.

The USD/CAD pair dropped to fresh session lows, around the 1.3115 region during the early North-American session, albeit quickly recovery few pips thereafter.

Despite upbeat US macro data, a sharp intraday US Dollar pullback from fresh multi-week tops - primarily led by a dramatic turnaround in the shared currency, was seen as one of the key factors behind the pair's intraday downtick.

This coupled with a strong pickup in Crude Oil prices further underpinned demand for the commodity-linked currency - Loonie and collaborated to the pair's sudden fall over the past hour or so, albeit the downtick, so far, seemed limited.

The fact that investors have been scaling back expectations of a 50 bps rate cut by the Fed at its upcoming meeting on July 30-31, any meaningful USD corrective slide is likely to remain shallow and should continue to lend support to the major.

Hence, it will be prudent to wait for a sustained weakness back below the 1.3100 handle before confirming that the pair's recent recovery from yearly lows has already run out of the steam and repositioning for a fresh leg of a near-term bearish trend.

Technical levels to watch