USD/CAD climbs to fresh 2018 tops near 1.3280

The greenback picks up further pace vs. CAD around 1.3280.
US-CA 2-year yield spread widen further, supporting the buck.
US Housing Starts and Building Permits next on tap.

Pablo Piovano FXStreet

The greenback trades in fresh yearly peaks vs. its Canadian counterpart on Tuesday, pushing USD/CAD to levels closer to the 1.3300 handle, or fresh YTD tops.

USD/CAD looks to tariffs, data

Heightened concerns on the US-China trade dispute has prompted a sell off in the riskier assets and the commodity bloc, lifting the buck and the pair to levels last traded a year ago in the 1.3280 region.

In addition, US-CA yields spread differentials continue to widen, particularly in the shorter end of the curve, lending additional support to the greenback, which trades in fresh YTD peaks when gauged by the US Dollar Index (DXY).

Further CAD weakness comes from crude oil dynamics, where the barrel of the West Texas Intermediate is extending the down move as nervousness is rising among traders in light of the upcoming OPEC meeting in Vienna on Friday.

Later in the NA session, US Housing Starts and Building Permits will be the only release in the US calendar seconded by the speech of San Francisco Fed J.Bullard at the ECB Forum in Sintra.

USD/CAD significant levels

As of writing the pair is losing 0.63% at 1.3285 facing the next hurdle at 1.3349 (high Jun.29 2017) seconded by 1.3423 (78.6%% Fibo of the 2017 drop) and finally 1.3541 (high Jun.9 2017). On the flip side, a breach of 1.3132 (61.8% Fibo of the 2017 drop) would open the door to 1.2991 (21-day sma) and then 1.2857 (low Jun.6).

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

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