USD/CAD bounces off 1.25 mark post-US durable goods orders

The USD/CAD pair held weaker through early NA session, albeit has managed to hold its neck above the 1.2500 handle despite weaker US durable goods orders. 

The pair ticked higher after data released from the US showed that durable goods orders, excluding transportation items, bettered expectations and climbed 0.5% m-o-m during July (0.4% expected). 

The positive reading, however, seems to have been negated by the headline numbers, showing a sharp m-o-m drop of 6.8% during the reported period, reversing all of the gains recorded in the last month.

Meanwhile, the prevalent positive tone around oil markets, with WTI crude oil holding with gains of around 0.5% was seen lending support to the commodity-linked currency – Loonie. This coupled with some US Dollar selling bias has failed to assist the pair to register any meaningful recovery from over 3-week lows. 

Moreover, traders seemed to refrain from placing aggressive bets ahead of the much-awaited speech by the Fed Chair Janet Yellen. Nevertheless, the pair remains on track to end the week on a softer note, extending its slide from the vicinity of 1.2800 handle, one-month high touched last week. 

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Technical levels to watch

A follow through weakness below the 1.25 handle, the pair is likely to accelerate the fall towards 1.2445-40 horizontal support before eventually aiming to test the 1.2400 round figure mark. On the upside, any recovery move now seems to confront some fresh supply near 1.2560 level, above which a bout of short-covering could lift the pair back towards the 1.2600 handle.