USD/CAD drops to over 1-week lows, farther below 1.31 handle

   “¢   The USD bulls held on the back-foot and did little to lend any support.
   “¢   Bearish traders seemed unaffected by a subdued crude oil price-action.
   “¢   Today’s US/Canadian jobs report might provide a fresh directional impetus.

After an initial uptick to the 1.3100 neighborhood, the USD/CAD pair met with some fresh supply and was now seen extending overnight retracement slide from seven-week tops.

A sharp US Dollar retracement slide from near 17-month tops, further aggravated by disappointing US ISM manufacturing PMI, was seen as one of the key factors prompting some aggressive long unwinding trade on Thursday.

The pair tumbled around 100-pips, taking along some short-term trading stops near the 1.3100 handle and seemed rather unaffected by a sudden fall in crude oil prices, which tend to undermine demand for the commodity-linked Loonie.

With oil prices consolidating overnight slump, a subdued USD price action did little to lend any support or assist the pair to regain positive traction. Traders also seemed reluctant to place any fresh bullish bets ahead of the upcoming event risks.

Currently placed at fresh weekly lows, around the 1.3065 region, today’s economic docket, highlighting the release of keenly watched US non-farm payrolls data and monthly Canadian jobs report, will now play an important role in determining the pair’s next leg of a directional move.  

Technical levels to watch

Immediate support is pegged near mid-1.3000s, below which the pair is likely to accelerate the slide further towards challenging the key 1.30 psychological mark. On the upside, the 1.3100-1.3110 region now seems to act as an immediate hurdle, which if cleared could lift the pair back towards the 1.3165-70 supply zone.