USD/CAD up little, around mid-1.2800s ahead of US CPI and BOC’s Poloz
| • Reviving USD demand helps build on overnight recovery move.
• Positive oil prices extend some support to the Loonie and cap gains.
• Focus remains on US inflation figures and BOC Gov. Poloz’s.
The USD/CAD pair extended its steady climb through the mid-European session and refreshed session tops in the last hour, albeit retreated few pips thereafter.
With investors looking past Friday's sluggish US wage growth data, a modest uptick in the US Treasury bond yields helped the key US Dollar Index to climb back above the key 90.00 psychological mark and assisted the pair to build on overnight rebound from the 1.2800 handle.
The pair touched an intraday high level of 1.2863 but struggled to build on the momentum and was being capped by a mildly positive trading sentiment around crude oil prices, which was seen lending some support to the commodity-linked currency - Loonie.
Meanwhile, traders also seemed to hold back from placing any aggressive bets ahead of today's key event risks and further collaborated towards keeping a lid on the pair's up-move.
The latest US consumer inflation figures might influence the Fed rate hike expectations, which along with the BOC Governor Stephen Poloz's scheduled speech would help determine the pair's next leg of directional move.
Technical levels to watch
Immediate support is pegged near the 1.2830-25 region and is followed by the 1.2800 handle, which if broken might turn the pair vulnerable to accelerate the fall towards 1.2755 intermediate support en-route the 1.2700 round figure mark.
On the flip side, 1.2870 level is likely to act as an immediate hurdle, above which the pair seems all set to surpass the 1.2900 handle and aim towards testing its next major hurdle near the 1.2960-65 region.
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