USD/CAD plunges below 1.32 handle amid broad based USD sell-off

A fresh wave of greenback selling pressure emerged during early NA session, with the USD/CAD pair tumbling below the 1.3200 handle to fresh multi-month lows. 

Spot came under intense selling pressure and accelerated the downslide to 1.3175-70 region after yet another batch of disappointing macro data from the US. The US Dollar got hammered after retail sales fell 0.3% m-o-m in May and headline CPI eased to 1.9%, which now seems to have raised skepticism over future Fed rate-hike moves.

Market expectations that the Fed is more likely to sound more cautious in wake of the recent data disappointment is evident from a sharp slide in the US treasury bond yields, leading to a broad based USD sell-off. 

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Today's disappointing US macro data would have definitely raised the stakes for the upcoming FOMC announcement and a possible dovish tilt should continue to exert further selling pressure around the major.

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Technical levels to watch

A follow through weakness below 1.3150 support is likely to accelerate the slide further towards the 1.3100 handle. On the upside, recovery back above the 1.3200 handle might now confront some fresh supply near the 1.3240 region, above which a bout of short-covering could lift the pair back towards the 1.3300 handle.