USD/CAD holds weaker below 1.27 handle, Canadian retail sales eyed
• Extends post-FOMC minutes downslide to hit 1-1/2 week lows.
• Steady USD decline helps offset softer oil prices.
• Canadian retail sales data awaited for fresh impetus.
The USD/CAD pair failed to build on an early uptick to 1.2715 area and has now drifted into negative territory for the third consecutive session.
The market chose to focus on the dovish part of Wednesday's FOMC meeting minutes, which revealed concerns over subdued inflationary pressure, with a follow-through US Dollar weakness now turning out to be one of the key factors weighing on the major.
Even a modest retracement in crude oil prices, which tends to dent demand for the commodity-linked currency - Loonie has failed to lend any support and stall the pair's slide back below the 1.2700 handle.
With today's fall, the pair has now eroded over 150-pips from near three-week tops touched on Tuesday and might struggle to find any buying interest amid relatively thin liquidity conditions in wake of Thanksgiving holiday in the US.
Meanwhile, the monthly Canadian retail sales data might provide some short-term trading impetus later during the NA session.
Technical levels to watch
Immediate support is pegged near 1.2665 level (monthly lows), below which the slide could get extended towards the 1.2600 handle en-route 100-day SMA support near the 1.2570-65 region.
On the upside, any recovery attempts beyond the 1.2700-1.2710 area might now confront fresh supply near the 1.2755-60 region, which if cleared could assist the pair back towards reclaiming the 1.2800 handle.