USD/CAD gains capped around 1.2600 ahead of US data

Upside faltered around the 1.2600 handle.
Support emerged near 1.2560.
US inflation figures next of relevance.

Pablo Piovano FXStreet

The greenback is trading on a soft note vs. its Canadian peer on Wednesday, with USD/CAD down smalls in the 1.2585/80 band.

USD/CAD eyes on US docket

The pair is extending the consolidative theme so far this week, with the upside still capped by the 100-day sma around 1.2620 ahead of last Friday’s tops around 1.2685, recorded in the wake of the Canadian jobs report.

The continuation of the downside momentum in crude oil prices is also weighing on CAD, where the barrel of the West Texas Intermediate is currently hovering over sub-$59.00 levels.

Furthermore, investors continue to look to US-CA yield spread differentials for direction in the near term, ahead of today’s US CPI and retail sales for the month of January. In Canada, Deputy Governor L.Schembri is due to speak tomorrow on ‘Canada’s approach to price stability’.

USD/CAD significant levels

As of writing the index is losing 0.16% at 1.2572 facing the immediate down barrier at 1.2523 (10-day sma) followed by 1.2469 (23.6% Fibo of the 2014-2017 drop) and finally 1.2450 (21-day sma). On the other hand, a breakout of 1.2621 (100-day sma) would aim for 1.2722 (38.2% Fibo of the 2017 drop) and then 1.2738 (200-day sma).

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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