USD/CAD consolidates losses, eyes daily lows

• USD/CAD erases weekly gains, back under 1.2800.
• Despite rising against European currencies, USD is down versus CAD, AUD and NZD.

The USD/CAD remains near daily lows amid a weaker US Dollar. The US Dollar Index is flat for the day but the greenback is falling against commodity and emerging market currencies despite higher US yields. The improvement in risk sentiment helped the Loonie.

A modest retreat of the US dollar pushed the US/CAD pair to 1.2777, the lowest level in two days. It rebounded to 1.2835 but during the US session dropped back under 1.2800, moving toward daily lows.

As of writing it was trading at 1.2785, down almost a hundred pips for the day. USD/CAD erased all weekly gain on Wednesday after being rejected from above 1.2900 yesterday.

Levels to watch

USD/CAD is trading below 1.2800, the lower limit of the previous range that signals weakness ahead. To the downside, the next support level might be seen at 1.2745/50 (May 14 low) followed by 1.2725.

If the pair recovers above 1.2800 it could remove the intraday bearish tone. Above resistances might lie at 1.2835 (US session high) and 1.2875/80 (May 16 high).