USD/CAD Slides Further, Eyeing 1.2500 Mark
Extending its weakness, the USD/CAD dropped to fresh 2016 lows of 1.2528 on broad based USD weakness and is currently trading marginally above day's through.
Adding on to its drop of over 14% from multi-year high touched in Jan., the pair continues to slide lower on the back of recovery in crude oil prices and some positive economic data from Canada. The pair has also felt the heat of Fed's dovish outlook on global economy, which has forced the central bank to refrain from raising interest rates.
The pair has now dropped to its lowest level since early July 2015 and the momentum seems strong enough to continue dragging the pair lower. However, daily RSI has now dropped below 30 mark, indicating slightly oversold conditions in the near-term.
Technical levels to watch
From current levels, an attempt of recovery might now confront immediate resistance near 1.2590-1.2600 round figure mark. This is followed by resistance near 1.2650 and 1.2700 levels. In order to open room for any further recovery in the near-term, the pair needs to decisively break-through 1.2700 mark, which if conquered might trigger a sharp short-covering rally towards its previous strong support now turned immediate strong resistance near 1.2850-60 region.
On the downside, additional weakness now seems to be arrested near 1.2500 psychological mark. However, a sustained weakness below 1.2500 mark might accelerate the fall towards the next round figure mark support near 1.2400 level.