USD/CAD moves off highs, back under 1.2900

  • USD/CAD retreats as US dollar rally eases.
  • DXY hit 5-day month highs before pulling back under 93.00.

The USD/CAD pair moved off daily highs and pulled back under 1.2900 amid a retreat of the US Dollar across the board. The greenback still remains the top performer posting important gains particularly against emerging market currencies, but it trimmed gains during the last hour.

USD/CAD peaked at 1.2922, the highest level since last Wednesday. Since then it dropped more than more than 50 pips and it was hovering around 1.2865/70, holding to significant daily gains but off highs and back into the recent trading range.

The US Dollar was rising in the market and after the release of US retail sales rallied further supported by rising US yields. The 10-year reached 3.06% for the first time since 2011. While the Loonie spiked lower after comments from Mexico's Economy Minister  Guajardo regarding NAFTA. He suggested that a deal before Thursday was not seen.
 
USD/CAD Levels to watch

The area around 1.2900 continues to be relevant from a technical perspective. A consolidation on top could clear the way to more gains. Above resistance levels might be seen at 1.2940 and 1.2975 (May 9 high). On the flip side, support might lie at 1.2860, followed by 1.2790 (May 15 low) and 1.2745/50 (May 14 low).

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