USD/CAD plummets to fresh multi-month lows, fast approaching 1.30 mark
|- The USD fails to capitalize on the overnight post-CPI bounce and rising US bond yields.
- Rallying Oil prices underpin Loonie and collaborated to the prevailing bearish pressure.
The USD/CAD pair plunged to 8-1/2 month lows in the last hour, with bears now eyeing a move towards challenging the key 1.30 psychological mark.
Having failed to capitalize on the overnight attempted recovery - led by hotter-than-expected US core CPI print, the pair came under some renewed selling pressure and finally broke through the previous multi-month swing lows support near the 1.3040 region.
A combination of factors - including the prevailing weaker tone around the US Dollar and some renewed pickup in Crude Oil prices, kept exerting bearish pressure for the third consecutive session and led to a fresh bearish breakdown on the last trading day of the week.
Despite a follow-through uptick in the US Treasury bond yields, the greenback failed to attract any buying interest, while the commodity-linked currency - Loonie remained supported by the recent bullish run in Oil prices to near six-week tops, levels beyond the $60.00/barrel mark.
Against the backdrop of escalating geopolitical tensions in the Middle East, Oil prices got an additional boost from a continuous decline in the US Crude inventories for the fourth consecutive weeks and the fact that US producers in the Gulf of Mexico have cut more than half their output because of a tropical storm.
Adding to this, possibilities of some near-term trading stops being triggered on a sustained break through the 1.3040 support area seems to have further aggravated the bearish pressure and contributed to the pair's ongoing slide to the lowest level since late-October 2018.
Moving ahead, Friday's US economic docket - featuring the release of PPI figures for June, coupled with comments by Chicago Fed President Charles Evans will now be looked upon for some short-term trading opportunities later during the early North-American session.
Technical levels to watch
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