USD/CAD retreats from 2018 tops, around 1.3080

CAD gained some ground after testing fresh YTD lows above 1.3100.
US-CA 2-year yield spreads keep supporting the upside in spot.
FOMC, BoC-speak, NAFTA, CA CPI in the limelight this week.

Pablo Piovano FXStreet

After clinching fresh 2018 tops in the 1.3130 region during early trade, USD/CAD has now faded part of that advance and trades in the 1.3080 region.

USD/CAD focused on NAFTA, FOMC, data

The pair keeps the march north unabated despite the ongoing correction lower from earlier 2018 tops in the vicinity of 1.3130, area coincident with the 61.8% Fibo retracement of the 2017 drop (1.3132).

Yields of the key US 2-year note has posted fresh 10-year tops above 2.30% earlier in the session, keeping US-CA yield spreads as one the main drivers of the pair’s price action along with the progress (or lack of it) from the NAFTA negotiations.

Looking ahead, the FOMC meeting emerges as the next risk event for the pair, while CAD should also be wary of BoC-speak (Wilkins speaks on Thursday) and CPI/Retail Sales due on Friday.

USD/CAD significant levels

As of writing the index is losing 0.08% at 1.3085 and a breach of 1.2949 (10-day sma) would target 1.2927 (50% Fibo of the 2017 drop) en route to 1.2842 (21-day sma). On the other hand, the next up barrier is located at 1.3125 (2018 high Mar.19) seconded by 1.3204 (resistance line off 2016 top) and finally 1.3349 (high Jun.21 2017).

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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