USD/CAD breaches 1.2500

FXStreet (Edinburgh) - The greenback extends its selling mood on Thursday, now dragging USD/CAD back below the 1.2500 key support.

USD/CAD weaker post-data

The pair has accelerated its intraday decline following opposite results from the US and Canadian economies. The Canadian trade deficit shrunk to $0.65 billion in December vs. $1.20 billion expected; whereas the US trade deficit widened to $46.56 billion in the same period vs. $44.20 billion forecasted. Further data showed Initial Claims rising to 278K in the week ended on January 30th, up from the 267K from the previous week.

“Technically, we think the USD may be resuming its push higher; gains may not come quite as quickly as in the past few weeks but the fundamental backdrop is positive for the USD”, suggested Shaun Osborne, Chief FX Strategist at TD Securities.

USD/CAD key levels

At the moment the pair is retreating 0.51% at 1.2498 and a breach of 1.2400 (psychological level) would open the door to 1.2390 (low Feb.4) and then 1.2353 (low Feb.3). On the flip side, a breakout of 1.2591 (high Feb.4) would clear the way to the psychological handle at 1.2600 and finally 1.2645 (high Feb.3).