USD/CAD: Recovery hits resistance under 1.3050

  • USD/CAD up on the back of a technical correction, a stronger US Dollar and NAFTA concerns. 
  • Recovery from September lows finds resistance below the 1.3050 area. 

The USD/CAD pair broke to the upside after moving in a consolidation range and trimmed weekly losses. From the level it had a week ago is 140 pips lower. 

After moving between 1.2975 and 1.3020, USD/CAD gained momentum and climbed to 1.3047, reaching the highest level since Wednesday. The pair was trading around 1.3025, holding a positive tone in the very short-term and without a clear bias on a wider perspective.

The move to the upside was boosted by a stronger US dollar. The greenback gained momentum after the release of US data (retail sales and consumer confidence) and amid higher US bond yields. Also the loonie was pressured by a decline in crude oil prices and not so positive expectations about NAFTA negotiation. Canadian Foreign Affair Minister Chrystia Freeland will not return to Washington for resumed NAFTA talks in the short-term, signaling a deal is not very close. 

USD/CAD Technical levels

To the upside, immediate resistance is seen at 1.3050, followed by 1.3075/80 (Sep 12 high) and 1.3105/10. On the flip side, support levels might lie at 1.3020, 1.3000 and 1.2975/80 (weekly low). 
 

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