USD/CAD hits fresh 4-month lows, focus remains on CAD GDP, FOMC

   •  Bears regain control amid persistent USD selling.
   •  Sliding oil prices fail to provide any respite.
   •  Canadian GDP/FOMC decision eyed for directional impetus. 

The USD/CAD pair came under some renewed selling pressure on Wednesday and is currently placed at fresh 4-month lows. 

After yesterday's directionless move, bears regained control and once again pushed the pair below the 1.2300 handle. With bulls little impressed by the US President Donald Trump’s first State of the Union Address, persistent US Dollar selling pressure was one of the key factors behind the pair's weaker tone through the early European session.

Meanwhile, the ongoing corrective slide in crude oil prices, which tends to undermine demand for the commodity-linked currency - Loonie, did little to lend any support and stall the pair's fall to its lowest level since Sept. 22.

Further downside, however, seems more likely to remain cushioned ahead of today's monthly Canadian GDP growth figures and the highly anticipated FOMC decision. Traders on Wednesday will also confront the release of ADP report on the US private sector employment but is likely to be overshadowed by the key event/data risk. 

Technical levels to watch

A follow-through selling pressure has the potential to continue dragging the pair towards mid-1.2200s en-route 1.2215 support and the 1.2200 handle. On the upside, any recovery attempts might now confront fresh supply near the 1.2335 horizontal zone and is followed by a strong supply zone near the 1.2380-90 region.