After bottoming out in the 1.2980 area, USD/CAD has sparked a correction higher, regaining the 1.3000 handle and above.
USD/CAD finds support around 1.2980/60
The pair is retreating for the second consecutive week so far, although its seems to have found decent support in the 1.2980/60 band, the area of 5-month lows, reinforced at the same time by the 23.6% Fibo retracement of 2016 drop at 1.2985.
The bearish note around the buck has intensified following the FOMC meeting on Wednesday, adding to the already persistent offered bias in response to ‘Trumponomics’.
Despite CAD has been recently better correlated with US-CA yield spreads, today’s renewed softer tone in crude oil prices seems to be helping the pair’s recovery. The barrel of West Texas Intermediate has returned to the mid-$53.00s after reaching fresh daily tops above the $54.00 mark in early trade.
On the data space, nothing noteworthy following better-than-expected Initial Claims and Q4’s Non-farm Productivity.
Looking to Friday’s docket, US Non-farm Payrolls will be in the limelight, with consensus expecting the economy to have created 175K jobs in January. Recall that the ADP report showed on Wednesday that the US private sector created 246K jobs during last month, surpassing prior surveys.
USD/CAD significant levels
As of writing the pair is losing 0.17% at 1.3026 facing the next support at 1.2980 (low Feb.1) followed by 1.2967 (low Jan.31) and finally 1.2906 (low Sep.9 2015). On the flip side, a breakout of 1.3051 (high Feb.2) would aim for 1.3103 (high Feb.1) and finally 1.3130 (200-day sma).
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