• Weighed down by persistent USD selling bias.
• Positive oil prices add to the downward pressure.
• US/Canadian data eyed for fresh impetus.
The USD/CAD pair continued weakening through the early European session on Thursday and slipped farther below the key 1.2500 psychological mark.
The pair extended overnight sharp retracement slide from mid-1.2600s, once again failing to sustain above the very important 100-day SMA, and was being weighed down by persistent US Dollar weakness.
Despite firming expectations that the Fed might opt for a faster m0netary policy tightening cycle, especially after yesterday's hotter-than-expected US CPI print, the greenback remained on the back-foot and was seen dragging the pair lower.
Meanwhile, strong follow-through strength in crude oil prices was further seen underpinning the commodity-linked currency - Loonie and also collaborated to the pair's offered tone on Thursday.
From a technical perspective, the pair's repeated failure at higher level and a subsequent breakthrough its near-term trading range now seems to suggest that bears are more likely to regain control. Hence, a follow-through weakness, led by some additional long unwinding trade, now looks a distinct possibility.
Moving ahead, today's release of ADP Canada National Employment Report, along with second-tier US economic data would now be looked upon for some fresh trading impetus later during the early NA session.
Technical levels to watch
Immediate support is pegged near 1.2460 level, below which the pair is likely to accelerate the fall towards 1.2435 intermediate support en-route the 1.2400 handle. On the upside, any meaningful recovery back above the 1.2500 handle might now confront fresh supply, and seems more likely to be limited, near the 1.2535-40 region.