USD/CAD finds some support near 1.2850 level

The USD/CAD pair seems to have found some intermediate support around 1.2850, with the pair now trading off session low level around 1.2865-60 band.

After last week's repeated failed attempts to conquer 100-day SMA resistance, the pair lost its upside momentum and finally broke on the downside. The pair is now trading lower for fifth consecutive day, losing over 250-pips from last week's high level of 1.3120. 

The Canadian Dollar maintained a strong bid tone against its US counterpart after last week's economic data pointed to the upcoming inflationary pressure that might restrict Bank of Canada from easing further. Adding to this buoyant crude oil prices, currently hovering above $49.00 mark is further extending support for the commodity-linked currency - Loonie. 

With a scheduled holiday in the US market in observance of Independence Day, market participants will focus on RBC manufacturing PMI for the month of June ahead of BoC's business outlook survey, which will provide an overview over the central bank's interest rate outlook for the near-future and could eventually determine the USD/CAD pair's direction in the near-term.

Technical levels to watch

Weakness below 1.2850 level is likely to get extended towards a short-term ascending trend-channel support near 1.2800 round figure mark. A convincing break below the ascending trend-line support now seems to trigger a fresh leg of downfall for the pair that could immediately drag the pair towards 1.2735-30 horizontal support. Alternatively, any attempts of recovery, and a subsequent strength above 1.2900 handle, has the potential to boost the pair back towards 50-day SMA resistance near 1.2935 region. A follow through buying interest now seems to assist the pair further towards 1.2960-65 resistance before heading back above 1.3000 psychological mark resistance, towards retesting 100-day SMA resistance near 1.3035-40 region.