USD/CAD drops to fresh 2-week lows, around mid-1.2400s

   •  USD selling remains unabated on Friday.
   •  Rebounding oil prices add to the downward pressure.
   •  Today’s economic data eyed for some fresh impetus.

The USD/CAD pair extended its retracement slide from mid-1.2600s, or weekly tops, and dropped to fresh two-week lows during the early European session.

The pair's overnight attempted recovery move, led by a sharp intraday slide in crude oil prices, got sold into near the 1.2535-40 region. Persistent US Dollar selling bias, despite stronger US inflation figures, and stability in oil prices prompted some fresh selling at higher levels. 

The USD selling remained unabated on Friday, which coupled with a positive sentiment surrounding oil markets continued exerting some downward pressure for the third consecutive session.

With today's fall, the pair has now reversed around 200-pips over the past three days as traders now look forward to a fresh set of economic data for some fresh impetus. Today's economic docket features the release of Canadian Manufacturing Sales data, along with US housing markets and Prelim UoM Consumer Sentiment, which might provide some short-term trading opportunities later during the early NA session.

Technical levels to watch

A follow-through weakness below 1.2435-30 immediate support is likely to accelerate the fall back towards the 1.2400 handle. On the flip side, any recovery attempts beyond 1.2470-75 area might now confront stiff resistance near the key 1.2500 psychological mark, above which a fresh bout of short-covering could lift the pair towards 50-day SMA barrier near the 1.2560 region.