USD/CAD plummets to 1-1/2 week lows on notable USD supply

   •  The post-FOMC USD selling remains unabated on Thursday. 
   •  Technical selling below 1.29 handle aggravates the downfall. 

The greenback selling remained unabated on Thursday, with the USD/CAD pair falling to 1-1/2 week lows during the early European session.

The pair extended its recent retracement slide from levels beyond the 1.3100 handle, 9-month tops, and tumbled over 180-pips on Wednesday. Against the backdrop of some optimism over NAFTA negotiations, Wednesday's not so hawkish Fed rate hike outlook prompted some aggressive selling around the major. 

The post-FOMC US Dollar weakness was also seen on Thursday and continued exerting some downward pressure on the major. Adding to this, possibilities of some short-term trading stops being triggered on a fall below the 1.2900 handle aggravated the downfall over the past hour or so.

Meanwhile, a subdued action around crude oil prices did little to influence the commodity-linked - Loonie, with the USD price dynamics acting as an exclusive driver of the pair's momentum on Thursday.

There isn't any major major moving economic data due today and hence, the focus would be on Friday's important Canadian macro releases - the latest consumer inflation figures and monthly retail sales. This along with the release of US durable goods orders might help investors determine the pair's next leg of directional move.

Technical levels to watch

A follow-through selling pressure has the potential to continue dragging the pair towards the 1.2810-1.2800 strong horizontal support, which if broken should pave the way for an extension of the pair's downward trajectory.

On the flip side, any recovery attempts back above 1.2875 level might now confront fresh supply near the 1.2900 handle, above which a bout of short-covering could lift the pair back towards the 1.2960-65 supply zone.