USD/CAD back below 1.2900 handle

The USD/CAD pair erased all of its early tepid bounce to 1.2920 and has now dipped back below 1.2900 handle, trading absolutely flat around yesterday's closing level.

The pair on Thursday fell for third consecutive day and broke below 100-day and 50-day SMAs confluence support level as the US Dollar came under intense selling pressure after BOE decided to stand pat. 

Adding to this, a minor recovery in crude oil prices further supported the bid tone surrounding the Canadian Dollar and continued exerting selling pressure around the USD/CAD pair. 

The pair also failed to extract any support from upbeat US economic releases on Thursday, which got negated by better-than-expected NHPI data from Canada. 

A slew of economic releases from the US accompanied with Canadian manufacturing sales data for the month of May would now be in focus during NA trading session on Friday, which has the potential to infuse additional volatility in the USD/CAD major. US economic data slated for release includes - CPI report, monthly retail sales, industrial production and Empire State manufacturing data, and consumer sentiment index. 

Technical levels to watch

On the immediate downside, a short-term ascending trend-line, near 1.2840 level, seems to extend immediate support for the pair. A follow through selling pressure below 1.2840 now seems to drag the pair immediately below 1.2800 and trigger a fresh leg of weakness that could take the pair back towards 1.2700 handle.

Meanwhile on the upside, 50-day SMA near 1.2940-50 region now seems to have emerged as immediate resistance above which the pair could head back to reclaim 1.3000 handle and extend its recovery towards 1.3030 resistance area. A sustained move above 1.3030 resistance now seems to pave way for a retest of 1.3100 handle.