USD/CAD climbs to near two-week tops, around mid-1.2400s

The USD/CAD pair traded with a mild positive bias during the early European session and was last seen hovering near two-week tops, just below mid-1.2400s.

The US dollar stood tall near three-month tops amid speculations that the Fed will tighten its monetary policy earlier if price pressures continue to intensify. The market expectations were further fueled by Wednesday's US ISM Manufacturing survey, which showed that the prices paid sub-component jumped to a record 92.1. This, in turn, was seen as a key factor that extended some support to the USD/CAD pair.

Meanwhile, a subdued action around crude oil prices did little to influence the commodity-linked loonie or provide any meaningful impetus to the USD/CAD pair. In fact, WTI consolidated just below the highest level since October 2018, touched on Thursday after a disagreement within the OPEC+ delayed a decision on output levels. Investors now expect the standstill could end with the OPEC+ not increasing output at all.

That said, a fresh leg down in the US Treasury bond yields held the USD bulls from placing any aggressive bets and might keep a lid on any further gains for the USD/CAD pair. Investors also seemed reluctant, rather preferred to wait on the sidelines ahead of Friday's release of the US monthly jobs data. The closely watched NFP report could influence the Fed's policy outlook and drive the USD in the near term.

Apart from this, headlines coming out of the OPEC+ meeting could infuse some volatility in the oil market. This, in turn, might further contribute to producing some meaningful trading opportunities. In the meantime, the USD/CAD pair is more likely to extend its sideways consolidative price move above 100-day SMA pivotal point.

Technical levels to watch