USD/CAD remains in a tight range at the beginning of the week, currently looking to extend the recent break above the key 1.3100 mark.
USD/CAD focus on US data
Following two consecutive sessions with losses, the pair is posting small gains on Monday after finding quite decent support in the vicinity of 1.3090 during overnight trade, where sits the 20-day sma.
In the meantime, the greenback continues to struggle for direction as investors remain vigilant on the speech by President D.Trump before Congress on Tuesday. The focus of attention will once again be on the potential economic measures, particularly after the recent announcement of a ‘phenomenal’ tax reform.
It is worth recalling that at his interview last week, US Treasury Secretary S.Mnuchin failed to unveil further details on any fiscal plan by the Trump’s administration, expressing instead his commitment to have some ‘significant reforms’ passed by August.
CAD continues to decouple from crude oil dynamics, extending the trend for several weeks now, and centering instead on the US-CA yield spread differentials, especially in the shorter end of the curve.
From the positioning front, CAD speculative net longs have increased to the highest level since late May according to the latest CFTC report in the week to February 21.
In the US data space, Pending Home Sales, Durable Goods Orders and the Dallas Fed index should keep the attention on the buck, while Dallas Fed R.Kaplan (voter, hawkish) is also due to speak later in the session.
USD/CAD significant levels
As of writing the pair is up 0.13% at 1.3110 and a breakout of 1.3118 (high Feb.24) would aim for 1.3148 (200-day sma) and finally 1.3211 (high Feb.22). On the flip side, the immediate support lines up at 1.3054 (low Feb.24) ahead of 1.3022 (low Feb.14) and then 1.3007 (low Feb.16).
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