USD/CAD nosedives to 3-1/2 month lows, farther below 1.3200 handle
|- The USD extended post-FOMC downfall and drops to three-month lows.
- Canadian Dollar remains supported by Wednesday’s domestic CPI print.
- Surging Oil prices underpin Loonie and add to the intense bearish pressure.
The USD/CAD pair continued losing ground through the mid-European session and weakened farther below the 1.3200 handle, hitting fresh 3-1/2 month lows in the last hour.
The pair extended this week's pullback from levels beyond the 1.3400 handle, with a combination of factors exerting some heavy bearish pressure and fueling the ongoing decline for the third consecutive session on Thursday.
The US Dollar dropped to its lowest level in three months on Thursday in the aftermath of dovish sounding Fed, indicating that it remains ready to ease monetary policy to combat subdued inflation and slowing growth.
On the other hand, the Canadian Dollar remained supported by Wednesday's hotter-than-expected consumer inflation figures, which might encourage the BoC to retain the current policy at its next meeting in July.
This coupled with a strong rally in Crude Oil prices provided an additional boost to the commodity-linked currency - Loonie and further collaborated to the pair's steep downfall to its lowest level since early-March.
In fact, Oil prices rallied over 3.5% and moved back closer to $56.00/barrel mark amid escalating tensions in the Middle East, especially after a US military drone was reportedly shot down by an Iranian surface-to-air missile.
Thursday's slide could further be attributed to some aggressive technical selling once the pair found acceptance below the very important 200-day SMA support and the previous swing lows support near the 1.3240 region.
The US economic docket - featuring the release of Philly Fed Manufacturing Index and weekly jobless claims data, along with Canadian ADP report on private sector employment will now be looked upon for some fresh impetus.
Technical levels to watch
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.