USD/CAD consolidates the Asian decline near 1.2560

• CAD regains the bids, despite poor jobs data.
• Rejected at 1.2600 as Oil edges higher in Asia.
• Focus shifts to the US CPI report.

Having facing rejection just shy of the 1.26 handle, the USD/CAD pair fell back into the red zone, now consolidating the renewed sell-off near 1.2560 region heading into Europe.

USD/CAD flirts with key support near 1.2550

The commodity-linked Loonie regained lost footing in Asia, as the bulls were rescued by strengthening oil prices, with the risk-recovery emerging the main theme ahead of the European open.

Meanwhile, the renewed selling pressure seen behind the US dollar versus its main peers amid increased nervousness ahead of the US CPI release due on the cards this Wednesday, also keeps the spot on the back foot,  with the downside likely to open up towards 1.2485 region should the US inflation numbers disappoint.

In the meantime, the major will get influenced by the risk trends amid light trading while the dust settles over Friday’s downbeat Canadian employment data.

USD/CAD levels to watch

Yohay Elam, Analyst at FXStreet, notes, “1.2790 was high in mid-November and serves as resistance. 1.2665 was a double-bottom in November and works as strong support. It is followed by 1.26, a round number that worked as resistance in October. 1.2540 capped the pair in early October when it traded in a narrow range.”

“1.2435 was a cushion for the pair during the month of October. 1.2335 gave support to the pair in late September and it worked well in January 2018. Even lower, 1.2250 cushioned the pair on its fall in February 2018. It is closely followed by 1.22. Strong support only awaits at 1.2070. The round number of 1.20 is next. And below there, only 1.18,” Yohay adds.