USD/CAD slides further below 1.21 as USD selling remains unabated

The USD/CAD pair continued with its well-established bearish trend and plunged to fresh 28-month lows on Friday.

The pair broke below the 1.2100 handle for the first time since mid-May 2015 and eroded around 40-pips since early Asian session amid broad base greenback sell-off, with the key US Dollar Index plummeting to 33-month lows near the 91.00 handle.

Against the backdrop Wednesday's surprise BOC rate-hike, positive trading sentiment around crude oil prices provided an additional boost to the commodity-linked currency - Lonnie and further collaborated to the pair's sharp fall to 1.2060 area.

Meanwhile, possibilities of some stops being triggered on a sustained break below the 1.2100 handle might have also collaborated towards aggravating the selling pressure surrounding the major. 

The pair would remain in focus on Friday and would now be guided by the latest Canadian employment details for the month of August, due for release later during the NA session.

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Technical levels to watch

A follow through weakness below mid-1.2000s would turn the pair vulnerable to extend the fall towards testing the key 1.20 psychological mark. On the upside, any recovery attempts now seems to confront immediate resistance near the 1.21 handle, above which a bout of short-covering could lift the pair towards 1.2130 level en-route the 1.22 round figure mark.