“¢ Hawkish hold from BoC continues to be weighed on Thursday.
“¢ USD retracement offset weaker oil prices and does little to support.
“¢ Traders now eye monthly Canadian GDP and US data for fresh impetus.
The USD/CAD pair remained under some selling pressure for the second consecutive session and retested overnight swing lows, touched in the aftermath of a hawkish hold from the BoC.
On Wednesday, the pair came under some intense selling pressure and tumbled over 200-pips from intraday tops after the BoC played down concerns over the pressure on the housing market and raised odds of a rate hike in July.
Adding to this, a goodish rebound in crude oil prices, which tends to underpin demand for the commodity-linked currency – Loonie, coupled with a sharp US Dollar retracement aggravated the selling pressure and dragged the pair to fresh weekly lows.
The greenback extended its corrective slide through the early European session and offset some renewed weakness in oil prices, which eventually capped the pair’s early recovery attempt to the 1.2900 neighborhood.
The pair, however, seems to have found some support near the 1.2835 region, albeit any strong recovery still seems elusive ahead of today’s important release of the monthly Canadian GDP growth figures. This coupled with second-tier US economic data should produce some meaningful trading opportunities later during the early North-American session.
Technical levels to watch
Any subsequent weakness is likely to find support at 50-day SMA, currently near the 1.2810 region, below which the pair is likely to extend the downfall towards 100-day SMA support near the 1.2740-30 zone.
On the upside, any recovery attempts might continue to confront some fresh supply near the 1.2900 handle, which if cleared might trigger a short-covering bounce and lift the pair back towards 1.2950-55 resistance.
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