USD/CAD Breaks Through 1.2800, Could be Vulnerable to Further Downside
As crude oil prices continue to scale fresh 2016 highs, the USD/CAD pair extended its slide back below 1.2800 handle.
Oil prices found support on Wednesday after EIA report showed US crude oil inventories unexpectedly fell by 3.4 million barrels. The commodity got further boost from Thursday's EIA monthly Oil Market Report that stated oil demand might surprise on the upside.
The USD/CAD pair is also feeling the pair of broader US Dollar weakness on the back of higher-than-expected US weekly jobless claims. The pair has now dropped to its lowest level in six days and could be vulnerable to further downside in the near-term.
Technical levels to watch
From current levels, the pair seems more likely to extend its downfall immediately towards 1.2750 support, which if broken should now open room for a drop below 1.2700 mark, towards 1.2655-50 horizontal support.
Meanwhile momentum back above 1.2800 handle might now confront immediate resistance near 1.2850-55 area. Only a sustained strength back above 1.2850 resistance would increase the prospects of a move back above 1.2900 handle towards Monday's closing high level resistance near 1.2955-60 region.