USD/CAD drops further and hits 1-month lows

• CAD up on NAFTA hopes and risk appetite. 
• Spot breaks key support levels and clears the way to more losses.

The USD/CAD pair continued to slide during the American session and broke under 1.2800, reaching the lowest level since late February. It remains near the lows, under pressure. 

The Canadian dollar gained momentum today after a report from Bloomberg mentioned that US President Trump was looking to reach a deal on NAFTA in two weeks, to be presented at the Summit of the Americas. White House’s idea is to secure a deal in principle and keep talking about the details in the round of negotiations. 

Hopes that trade tensions between US and Canada will be avoided pushed USD/CAD to the downside. Also today, the stabilization in crude oil prices and the recovery in equity princes in Wall Street also contribute to the slide of the pair. 

Levels to watch 

Recently it bottomed at 1.2780 and it was trading at 1.2795, headed toward a close below the 1.2800/20 key support area that would clear the way to more losses. The next strong support and the potential target is seen at 1.2910/20. 

It the US dollar rebounds and manages to rise significantly above 1.2815 it would remove the short-term bearish tone. The key level to the upside is located at 1.2920, the upper limit of the recent trading range and also the 20-day moving average. A break higher seems unlike at the moment unless there is a sharp reversal before the end of the session.