USD/CAD slips below 1.2400 handle

The USD/CAD pair traded with a mild negative bias for the third consecutive session on Friday and has now moved on the verge of breaking below the 1.2400 handle.

The pair extended this week's rejection slide from the key 1.2500 psychological mark and was being weighed down by persistent US Dollar selling bias. Despite the end of the US government shutdown, the USD extended its bearish slide to fresh three-year lows and continued exerting some downward pressure on the major.

Meanwhile, the market seems to have largely ignored concerns over the termination of the NAFTA agreement by the US, with a heavily offered tone surrounding the greenback turning out to be an exclusive driver of the pair's fall to one-week lows. 

Moving ahead, today's US economic docket, featuring the release of flash PMI prints along with existing home sales data, would now be looked upon for some immediate respite for the USD bulls. Also in focus would be the weekly US crude oil inventories data, which tends to influence demand for the commodity-linked currency - Loonie and provide some short-term trading opportunities.

Technical levels to watch

On a sustained weakness below the 1.2400 handle, the pair is likely to accelerate the fall towards the 1.2360-55 support area before eventually dropping to test the 1.2300 round figure mark.

Meanwhile, on the upside, any meaningful recovery attempt might now confront fresh supply near the 1.2435 region, above which a bout of short-covering could lift the pair back towards 1.2480 resistance en-route the 1.25 handle.