USD/CAD extends slide to 6-day lows under 1.2950

• Loonie among top performers of the day ahead of next week BoC meeting. 
• USD/CAD drops to test last week lows. 

The USD/CAD pair broke below yesterday’s lows and tumbled to 1.2928, hitting the lowest level since last Wednesday. As of writing was trading at 1.2930 with the negative tone intact. 

Since the beginning of the week, the pair lost almost 90 pips. The slide took place amid a stronger Loonie supported by Canadian data and a correction of the US dollar. 

The Canadian dollar received support on Monday from the Bank of Canada Business Outlook Survey, that showed an upbeat scenario and fueled rate hike expectations.  “We expect headline inflation to ease over the coming months as energy base effects kick in. But with most measures of core inflation around the BoC’s 2% target, we expect the central bank to hike rates when it meets next week”, wrote ING analysts. 

Regarding the US dollar, today’s US data failed to boost the greenback. On Wednesday, the minutes of the latest FOMC meeting will be released.

USD/CAD Levels to watch 

The pair is testing the 1.2925/30 support area (last week lows also) below that level attention would turn to 1.2895/1.2900 (psychological / 200-SMA) followed by 1.2885. On the upside resistance now could be located at 1.2950/55 (Oct 15 low), 1.2985 and 1.3000.