USD/CAD Review: Drops to 50-DMA support, 2-week lows amid notable USD supply

   •  The prevalent USD selling bias prompts some fresh selling on Wednesday.
   •  Bullish oil prices underpin Loonie and add to the downward pressure.

The greenback kept losing ground against its Canadian counterpart, dragging the USD/CAD pair below the 1.3100 handle to two-week lows. 

The pair extended overnight rejection slide from the 1.3200 neighborhood and was further weighed down by a combination of negative factors, ranging from the prevalent US Dollar selling bias and bullish commodity prices. 

Ahead of a crucial meeting between the US President Donald Trump and European Commission President Jean-Claude Juncker, amid heightened trade tensions in the global economy, weaker US Treasury bond yields kept the USD bulls on the defensive. 

This coupled with a follow-through positive momentum in crude oil prices, supported by overnight API report that showed an unexpected fall in the US inventories, underpinned the commodity-linked currency - Loonie and further collaborated to the pair's heavily offered tone.

Technical Analysis

The latest leg of sharp decline since the early European session could also be attributed to some technical selling below an important horizontal support near the 1.3140-35 region. 

The pair has now dropped to test 50-day SMA support for the first time since late-May and a follow-through weakness should pave the way for an extension of the near-term downfall. 

Spot rate: 1.3091
Daily High: 1.3166
Trend: Bearish 

Resistance
R1: 1.3140 (horizontal zone)
R2: 1.3166 (current day swing high)
R3: 1.3187 (R1 daily pivot-point)

Support
S1: 1.3064 (monthly low set on July 11)
S2: 1.3040 (horizontal zone)
S3: 1.3000 (psychological round figure mark)