“¢ BoC’s business outlook survey report continues to underpin CAD.
“¢ Persistent USD selling bias exerts some additional downward pressure.
“¢ Weaker oil prices do little to lend any support or stall the downfall.
The USD/CAD pair finally broke down of its Asian/early European session consolidation phase and dropped to fresh multi-day lows, around mid-1.2900s in the last hour.
The pair extended last week’s rejection slide from 100-day SMA barrier and kept losing ground for the fourth consecutive session, weakening farther below the key 1.30 psychological mark. The prevalent US Dollar selling bias, despite a modest uptick in the US Treasury bond yields, turned out to be one of the key factors exerting downward pressure.
Meanwhile, the Canadian Dollar remains underpinned by the Bank of Canada’s Autumn Business Outlook Survey, which painted an upbeat picture and fueled rate hike expectations. Meanwhile, a weaker tone around crude oil prices, which tend to undermine demand for the commodity-linked currency – Loonie, also did little to lend any support and stall the ongoing decline.
In absence of any major market moving economic releases, the USD price dynamics might continue to act as an exclusive driver of the pair’s momentum on Tuesday. Moving ahead, Wednesday’s key release of the latest FOMC monetary policy meeting minutes will play an important role in determining the pair’s next leg of the directional move.
Technical levels to watch
A follow-through selling below 1.2930 level is likely to accelerate the slide further towards the very important 200-day SMA support, currently near the 1.2895 region. On the flip side, any meaningful recovery attempt might now confront some fresh supply near the 1.30 handle, above which a fresh bout of short-covering could lift the pair back towards 100-DMA hurdle near the 1.3060-65 region.
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