USD/CAD falls to fresh monthly lows, around mid-1.2900s
| • Extends overnight rejection slide from 100-DMA resistance.
• Traders shrug off NAFTA uncertainties amid fresh USD selling.
• Bullish oil prices underpin Loonie and exert additional pressure.
After an initial uptick to 1.2990 level, the USD/CAD pair met with some fresh supply and was seen extending overnight sharp retracement slide from a multi-day high level of 1.3065.
On Tuesday, the pair struggled to sustain early up-move beyond the 100-day SMA and was being weighed down by a combination of factors - upbeat Canadian manufacturing sales and bullish crude oil prices. The pair weakened back below the key 1.30 psychological mark and kept losing ground through the early European session on Wednesday, shrugging off the uncertainties surrounding NAFTA negotiations.
Meanwhile, the US Dollar failed to capitalize on overnight goodish rebound from near seven-week lows and rather seemed unaffected by the ongoing upsurge in the US Treasury bond yields. In fact, yields on the benchmark 10-year bonds rose further beyond the 3.0% mark but did little to revive the USD demand and stall the pair's ongoing downfall to fresh monthly lows.
The pair has now lost over 110-pips over the past 24-hours and now seems poised to continue with its bearish as traders now look forward to the US housing market data - building permits and housing starts, for some immediate respite for the bulls.
Technical levels to watch
A follow-through selling pressure has the potential to continue dragging the pair further towards the 1.2900 handle en-route the very important 200-day SMA support near the 1.2865 region. On the flip side, the 1.2995-1.3000 region now becomes immediate strong hurdle and any subsequent up-moves might be capped at 100-day SMA hurdle near the 1.3045-50 region.
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