USD/CAD breaks below 1.23 handle, fresh 4-month lows

   •  Canadian core retail sales data prompts fresh selling.
   •  Surging oil prices exerting additional downward pressure.
   •  USD resumes bearish slide post-ECB.

The USD/CAD pair stalled its steady recovery move near the 1.2345 region and tumbled to fresh 4-month lows during the early NA session. 

The pair met with some fresh supply and weakened farther below the 1.2300 handle after data released from Canada showed core retail sales, excluding automobiles, recorded a strong growth of 1.6% m-o-m in November as against 0.8% expected. 

Meanwhile, the overall sales fell short of consensus estimates and increased 0.2% m-o-m during the reported period, albeit was largely offset by the fact that it marked the third consecutive month of growth. 

Adding to the positive economic data, a fresh wave of an upsurge in crude oil prices provided an additional boost to the commodity-linked currency - Loonie and further collaborated to the pair's sharp fall over the past hour or so. 

Separately, the US weekly initial jobless claims rose to 233K during the week ended Jan. 19, better-than 240K expected but did little to ease the prevalent strong bearish pressure surrounding the US Dollar. 

Technical levels to watch

Immediate support is now pegged near the 1.2250-45 region, below which the pair might break below the 1.2200 handle and head towards testing 1.2175-70 strong horizontal support.

On the upside, any meaningful recovery back above the 1.2300 handle might continue to confront fresh supply near the 1.2335-40 region, above which a bout of short-covering could lift the pair back towards 1.2380 intermediate resistance en-route the 1.2400 handle.