USD/CAD climbs back above 1.3450 as the US Dollar keeps rising

  • US Dollar extends gains during American session, particularly against commodity and EM currencies. 
  • USD/CAD remains in recent range, now closer to the upper limit. 

The USD/CAD pair bottomed earlier today at 1.3399, the lowest level since last Friday but the negative tone shifted dramatically. When the pair appeared to be ready to test lower levels it bounced to the upside, recovering all the lost ground and more. 

Near the end of the session, USD/CAD trades at 1.3467, the highest level of the day. The pair still continues to move within the recent range but now closer to the upper limit. The key resistance continues to be the 1.3490/1.3500 zone. A consolidation on top would likely clear the way to more gains. On the flip side, 1.3445 is again a support, followed by 1.3400 (May 16 low and short-term uptrend line). 

No sleeping time for the US Dollar 

The rebound from 1.3400 took place amid a rally of the US Dollar across the board, favored by higher US yields and economic data. Also worth noting is the positive correlation over the last days between US stocks and the greenback. The DOW JONES is up 0.85%, gaining for the third day in a row like the DXY that rises 0.30% today and trades near 98.00, on its way to the highest daily close since late April. 

The Loonie, despite falling against the greenback, is consolidating gains versus commodity currencies. The move higher was supported by upbeat data from Canada (ADP employment report and manufacturing shipments) and higher crude oil prices. BoC Governor Poloz’s comments had no influence on price action. 

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