USD/CAD corrects farther below 1.30 mark ahead of BoC

   “¢   A sharp USD retracement prompts some selling on Wednesday.
   “¢   Repositioning ahead the BoC adds to the downward pressure.

The USD/CAD pair extended its retracement slide from an intraday high level of 1.3040 and has now reversed all of the yesterday’s up-move to over 2-month tops.

After a brief consolidation during the Asian session, the pair met with some fresh supply and weakened back below the key 1.30 psychological mark. A sharp US Dollar profit-taking slide was seen as one of the key factors that prompted fresh selling since the early European session.

Despite a goodish pickup in the US Treasury bond yields, the USD failed to catch any bids and extended its retracement slide from the 95.00 neighborhood, or fresh yearly tops, set in the previous session.  

Meanwhile, a consolidative action around crude  oil  prices did little to influence demand for the commodity-linked currency – Loonie, with the USD dynamics acting as an exclusive driver of the pair’s downfall to intraday lows, near the 1.2980-75 region.  

The corrective fall could further be attributed to some long unwinding trade ahead of today’s key event risk – BoC monetary policy update, due to be announced during the early North American session.  

This coupled with US macro data – ADP report on private sector employment and the second estimate of Q1 GDP growth figures, might trigger some volatile moves and assist traders to grab some short-term opportunities.  

Technical levels to watch

Immediate support is pegged near 1.2955-50 region, below which the corrective slide could further get extended towards the 1.2900 handle en-route 1.2875 horizontal support. On the upside, momentum back above the 1.30 handle now seems to confront fresh supply near the 1.3025 region, which if cleared now seems to pave the way for an extension of the pair’s bullish momentum towards 1.3090-1.3100 next major supply zone.