USD/CAD drops to 1.2900 ahead of US PMI release

The Canadian Dollar is catching fresh buying interest against its US counterpart that is exerting some selling pressure in the USD/CAD pair, forcing it to erase all of its early gains and hit fresh session low level of 1.2900. 

A broadly weaker US Dollar seems to assist a minor recovery in crude oil that is eventually extending support to the Canadian Dollar. The Canadian Dollar also remained in demand after Thursday's release that showed higher-than-expected rise in the price of raw materials purchased by manufacturers, dampening expectations of any further easing by BOC.

Traders now await for the release of US ISM manufacturing PMI data for June, which is expected to match May's reading of 51.4. Any significant deviation from the expected number might trigger some volatile moves in the what has been a steady trading session on Friday, amid thin market liquidity conditions.

Technical levels to watch

Any further weakness from current levels is likely to find support near 1.2900 round figure mark, below which the pair is likely to extend its slide towards a short-term ascending trend-line support near 1.2800 region. Meanwhile on the upside, the pair need to regain momentum above 1.2950 level in order to attract fresh buying interest. A decisive move back above 1.2950 level has the potential to boost the pair beyond session high level of 1.2975, towards 1.3000 psychologcial mark resistance.