USD/CAD tumbles further, 1.2700 on sight?

The Canadian Dollar is trading on a firm note on Wednesday, now dragging USD/CAD to fresh daily lows in the vicinity of the 1.2700 key support.

USD/CAD attention to FOMC

After testing the area of 5-week tops in the 1.2780 area on Tuesday, the pair met some sellers today and is now trading in the negative territory after two consecutive daily advances.

In spite of the current knee-jerk, spot keeps the moderate recovery alive so far, posting gains for the third consecutive week after recording lows near 1.2410 in late July, levels last seen in June 2015.

In the data space, US building permits and housing starts came in on the soft side earlier in the session, adding to the pair’s decline, while crude oil prices are trading flat ahead of the EIA’s report due later in the NA session.

Further out, the FOMC minutes will be the salient event this week, with the reduction of the Fed’s balance sheet and potential rate hikes in Q4 on top of investors’ interest.

USD/CAD significant levels

As of writing the pair is losing 0.20% at 1.2731 and a breach of 1.2692 (10-day sma) would open the door to 1.2648 (low Aug.11) and finally 1.2604 (21-day sma). On the other hand, the next hurdle is located at 1.2781 (high Aug.15) seconded by 1.2930 (55-day sma) and then 1.2940 (38.2% Fibo of the 2017 drop).