The boost came amid a broad sell-off of commodity-related currencies after positive U.S. economic data overshadowed soft data from China and Europe, which weighed on the Canadian dollar and lifted the greenback across the board.
So far this Thursday, USD/CAD has traded a limited range between 0.9860 and 0.9880, last at 0.9863. Should price manage to break above the earlier mentioned levels of resistance, then the market may be poised for a shift in directional bias to the upside, with offers noted at 0.9940 (38.2%, 1.0444/0.9631), 0.9988 (May 15 low) and 1.0040 (50%, 1.0444/0.9631). The downside offers support at 0.9830 (intraday), 0.9815 (Sep 20 high) and 0.9800 (April 27 low).
CAD traders will be looking to Canada's Ivey PMI indicator for direction later today, as well as to the release of minutes from the latest FOMC meeting. On Friday, market participants will have important Canadian jobs numbers for September.
From TD securities: “It is also worth keeping in mind that speculative positions in the CAD have been at a record net long levels for the past three weeks, so progressive signals of CAD pressure should unwind some of those trades and add to USD/CAD’s lift. A more rapid squeeze on those long positions is not out of the question either.”