USD/CAD drops more than 100 pips from daily highs

USD/CAD reversed and trimmed most of the day’s gains. The pair peaked earlier at 1.3085, level located almost two hundred pips above from Asian session lows and then retreated sharply, with the US dollar pulling back across the board. It dropped to 1.2925 and it was trading at 1.2950/60, less than 50 pips above yesterday’s closing price.

The loonie recovered ground versus greenback as stocks in Wall Street jumped to the upside. The Dow Jones rose 250 points from the lows and is now up 0.28%; also US bond yields moved off session lows.

Despite US weakness and several reversals across financial markets, crude oil remained steady consolidating losses. The WTI is down 3.60% and continues to hover around $46.50. As the US session enters the last hour of trading, volatility is likely to ease.

USD/CAD levels to watch

To the upside, resistance levels might be located at 1.2985 (June 6 high) 1.3015/20 (May 31 low) and 1.3085 (daily high). On the flip side, support could now be seen at 1.2925 (American session low), 1.2895 (daily low) and 1.2820/25 (June 15 low).