USD/CAD eases-off monthly tops, looks to test 1.2500

• USD selling gathers pace.
• Loonie resilient to tumbling oil prices.
• Focus shifts to the US and Canadian trade figures.

The USD/CAD pair failed several attempts to take-out the stiff resistances lined up near 1.2560 levels and fell back into the negative territory, with the bears now targeting the 1.2500 support amid widespread risk-aversion.

The latest leg down in the spot can be mainly attributed to a fresh bout of selling seen around the greenback versus its main peers, as the sell-off in Treasury yields weighs amid a rout in global equities. The USD index drops -0.20% to print daily lows near 89.40 levels.

On the CAD-side of the equation, the recovery seen in oil prices on the back of easing risk-aversion, lifted the sentiment around the Loonie while investors remain expectant of a slight decrease in the Canadian trade deficit numbers due on the cards later today.

Earlier in the day, the major clocked fresh four-week tops at 1.2565 after a risk-aversion wave gripped the Asian markets and knocked-off the higher-yielding oil alongside. WTI reverses a dip to two-week lows of $ 63.30 to now trade back above the $ 63.50 barrier.

Technical levels to watch

A strong follow-through selling interest has the potential to continue pushing the pair further towards the key 1.2500 psychological support en-route 1.2450/39 (5-DMA) demand zone. On the flip side, the 1.2565 monthly top might continue to act as an immediate resistance, which if broken is likely to accelerate the advance towards 1.2600 strong natural resistance.