FxWirePro: USD/CAD heads deeper into bear territory, 1.2500 a key barrier

• The USD/CAD pair declined on Wednesday as oil prices continued its upward march, while domestic data showed a larger-than-expected increase in manufacturing sales.
   
• Canadian factory sales grew by 1.1 percent in May from April, hitting a record level on higher sales of motor vehicles and parts, data from Statistics Canada showed. Analysts had forecast an increase of 0.8 percent.
   
• Prices of oil, one of Canada's major exports, were supported by strong demand for gasoline, but rising output from OPEC producers revived concerns about a persistent overhang of excess crude.
   
• The ongoing weakness is set to continue for this pair as the resistance level at 1.2651 is likely to act as strong barrier to the bulls and bring a further decline towards lower levels.
   
• The immediate support can be seen at 1.2564, break below this level will expose the pair to next support level at 1.2513.
   
• Major resistance can be seen at 1.2651, break above this level will expose the pair towards 1.2700 levels.
  
  Resistance Levels
  
  R1: 1.2606 (50% Retracement level)
  
  R2: 1.2651 (61.8% Retracement level)
  
  R3: 1.2700 (July 18th high)
  
  Support Levels
  
  S1: 1.2564 (38.2% Retracement level)    
  
  S2: 1.2513 (23.6% Retracement level)
  
  S3: 1.2500 (Psychological levels)

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