USD/CAD slammed below 1.2850 after Canadian CPI

The USD/CAD pair remained well offered and extended its slide further below 1.2900 handle, breaking its six-day winning streak, to currently trade at session low level below 1.2850.

According to the data released by Statistics Canada, the headline CPI for the month of May came-in to show a m-o-m rise of 0.4% vs 0.5% expected. On a yearly basis, the CPI rose 1.5% in the 12 month to May, showing deceleration from 1.7% recorded in April. The Bank of Canada's core index also slowed and increased 2.1% in the 12 months to May, after rising 2.2% in April.

The USD/CAD pair extended its downslide despite of slightly softer-than-expected Canadian monthly CPI print. The sharp fall in the major could be attributed to a remarkable recovery staged by the black gold (oil), which has now erased most of Thursday's sharp losses after being slammed below $46.00/barrel mark, earlier on Friday.

Moreover, a broadly weakening US Dollar is also exerting downward pressure on the USD/CAD pair. Nevertheless, the pair still seems to be headed towards registering a minor weekly gain, its first weekly gain in the previous four.

Technical levels to watch

Weakness below 1.2850 support has the potential to drag the pair below 1.2800 handle, towards 1.2785-80 support area. Slide below 1.2785-80 support is likely to get extended further towards next major support near 1.2735-30 region.

On the flip side, 1.2900 round figure mark now seems to have turned as immediate resistance and is followed by resistance near 1.2965-70 area. Only a decisive move back above these resistance levels might negate expectations of further bearish move and pave way for further recovery for the pair.