USD/CAD flirting with monthly lows, just above 1.2900 handle
| • The USD selling pressure remains unabated on Thursday.
• Bullish oil prices underpin Loonie and add to the weakness.
• NAFTA uncertainties might help limit immediate sharp downfall.
The USD/CAD pair remained under some selling pressure for the third consecutive session on Thursday, with bulls trying to defend the 1.2900 handle.
The pair extended this week's rejection slide from 100-day SMA support turned resistance and was being weighed down by the prevailing bearish sentiment surrounding the US Dollar. Even overnight reports, claiming that the US and Canada wouldn't be able to reach a NAFTA deal this week, failed to assist the pair to register any meaningful recovery from monthly lows.
Meanwhile, the ongoing bullish run in crude oil prices underpinned the commodity-linked currency - Loonie and kept exerting downward pressure through the mid-European session on Thursday. WTI crude oil prices held above the $71.00 mark and were supported by Wednesday's bullish EIA report, which showed that the US oil inventories decrease by 2.1 million barrels and gasoline output decreased to an average of 10.3 million barrels per day.
Traders now look forward to the US economic docket, featuring the second-tier releases of Philly Fed Manufacturing Index, usual initial weekly jobless claims and existing home sales data. This coupled with Canadian ADP report might produce some meaningful trading opportunities later during the early North-American session.
Technical levels to watch
A follow-through weakness below the 1.2900 handle is likely to get extended towards the very important 200-day SMA support, currently near the 1.2865 region. On the flip side, any attempted recovery back above 1.2935-40 region might now be capped and confront some fresh supply near the key 1.30 psychological mark.
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