After not taking advantage of the first lukewarm recovery moves in the 1.2600 middle zone, the USD/CAD made new offers and has now moved to the brink of breaking below 1.2600.
Investors were not impressed with the upbeat US housing market rates, showing that both construction permits and housing began to improve consensus estimates and witnessed a strong rebound in June. The same is evident by the lack of follow-up through buying interest in US dollars, which eventually led to the decline.
In the meantime, Canadian manufacturing sales were expected to improve more than expected, with 1.1% monthly in May, compared to the expected 0.8%, supporting the Canadian Dollar and helping the pair pull back closer to the 14 months in the previous session.
Traders, however, refrained from aggressive betting and await today's official EIA report on US crude inventories, which could now act as the next trigger that drives commodity currency - Loonie .
Technical levels to see
A follow-through selling pressure below 1.2600, which leads to a subsequent breach below the support of yesterday's lows, near the 1.2580 level, would prompt the vulnerable pair to accelerate lowering towards the intermediate 1.2535- 30 on the path to the psychological level 1.25.
On the upside, any recovery attempt could continue near the 1.2600 middle zone, above which the pair could make another attempt to win the 1.2700 level.