USD/CAD Slides Further, Eyeing 1.2500 Mark
Extending its weakness, the USD/CAD dropped to fresh 2016 lows of 1.2528 on broad based USD weakness and is currently trading marginally above day's through.
Adding
on to its drop of over 14% from multi-year high touched in Jan., the
pair continues to slide lower on the back of recovery in crude oil
prices and some positive economic data from Canada. The pair has also
felt the heat of Fed's dovish outlook on global economy, which has
forced the central bank to refrain from raising interest rates.
The
pair has now dropped to its lowest level since early July 2015 and the
momentum seems strong enough to continue dragging the pair lower.
However, daily RSI has now dropped below 30 mark, indicating slightly
oversold conditions in the near-term.
Technical levels to watch
From
current levels, an attempt of recovery might now confront immediate
resistance near 1.2590-1.2600 round figure mark. This is followed by
resistance near 1.2650 and 1.2700 levels. In order to open room for any
further recovery in the near-term, the pair needs to decisively
break-through 1.2700 mark, which if conquered might trigger a sharp
short-covering rally towards its previous strong support now turned
immediate strong resistance near 1.2850-60 region.
On the
downside, additional weakness now seems to be arrested near 1.2500
psychological mark. However, a sustained weakness below 1.2500 mark
might accelerate the fall towards the next round figure mark support
near 1.2400 level.
