USD/CAD bounces off weekly lows as BoC decision looms

   “¢   ADP report/prelim US Q1 GDP growth falls short of market expectations.
   “¢   Softer Canadian data helps limit further downside, at least for the time being.
   “¢   Today’s key focus would remain on the latest BoC monetary policy update.

The USD/CAD pair accelerated its retracement slide from an intraday high level of 1.3040 level and refreshed weekly lows on softer US macro data.

Selling pressure around the major  remained unabated through the early North American session after the latest ADP report showed that the US private-sector employers added less than expected jobs during the month of May.  

Adding to this, previous month’s reading was also revised lower, which coupled with a downward revision of the Q1 US GDP growth kept exerting downward pressure on the US Dollar and dragged the pair to an intraday low, near mid-1.2900s.

Further downside, however, remained limited on the back of softer Canadian macro data – Q1 current account deficit and industrial product price index (IPPI) for April.

Moreover, investors also seemed reluctant to place aggressive bets ahead of today’s key event risk – the latest monetary policy update by the BoC, due in a short while from now, which helped the pair to quickly recover around 40-pips from session lows.

Technical levels to watch

Any subsequent up-move beyond the key 1.30 psychological mark is likely to confront resistance near the 1.3025 region, above which the pair is likely to aim towards surpassing the 1.3050 supply zone and aim towards reclaiming the 1.3100 handle.  

On the flip side, sustained weakness below the 1.2955-50 region now seems to pave the way for an extension of the pair’s corrective slide toward the 1.2900 handle en-route mid-1.2800s and 50-day SMA support near the 1.2815 region.