USD/CAD leaps to 1.2630, weekly tops

Spot remains bid above 1.2600.
Weekly gains, however, stay limited near 1.2630.
US CPI, BoC-speak next on tap.

Pablo Piovano FXStreet

The Canadian Dollar is trading on the defensive vs. its American neighbour on Tuesday, lifting USD/CAD to test weekly tops in the 1.2625/30 band.

USD/CAD focused on US data, BoC

The pair is reverting two consecutive daily pullbacks although it remains well supported around the 1.2500 neighbourhood, with gains limited in the 1.2680 area (spike post-Canadian jobs report on Friday).

In addition, CAD is deriving extra weakness from the softer tone in the barrel of West Texas Intermediate, which has resumed the downside below the $59.00 mark today. Furthermore, US-CA yield spread differentials continue to favour the buck, as yields of the US 10-year note are gyrating around the 2.85% handle after climbing as high as the 2.90% region seen at the beginning of the week, or multi-year peaks.

Later in the week, US inflation figures tracked by the CPI are due tomorrow followed by January’s retail sales. In Canada, Deputy Governor L.Schembri is due to speak on Thursday on ‘Canada’s approach to price stability’.

USD/CAD significant levels

As of writing the index is gaining 0.27% at 1.2613 and a breakout of 1.2681 (high Feb.9) would aim for 1.2722 (38.2% Fibo of the 2017 drop) and then 1.2743 (200-day sma). On the downside, the immediate support aligns at 1.2497 (10-day sma) followed by 1.2469 (23.6% Fibo of the 217 drop) and finally 1.2444 (21-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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