USD/CAD sits at 2-1/2 week tops, above 1.31 handle ahead of US/CA macro data

Haresh Menghani FXStreet

• A strong follow-through USD upsurge helps build on the overnight positive move.
• Subdued oil prices underpin Loonie and remain supportive of the momentum.
• Today’s US CPI & Canadian jobs data might help determine the near-term trajectory.

The USD/CAD pair continued gaining positive traction for the second consecutive session and climbed to 2-1/2 week tops on Friday, levels beyond the 1.3100 handle.

Chicago Fed President Charles Evans' hawkish comments on Thursday added fuel to the ongoing US Dollar bullish trend and helped the pair to catch some strong bids near the key 1.3000 psychological mark.

In an interview, Evans, a known dove, said that the US economy is performing very well and continued growth has cleared the way for one or two more interest rate hikes in 2018.

A strong follow-through USD upsurge, lifting the key US Dollar Index to the 96.00 handle, or over 13-month tops, was seen as one of the key factors driving the pair higher through the early European session on Friday.

This coupled with a subdued action around crude oil prices further undermined the commodity-linked currency - Loonie and remained supportive of the pair's positive momentum back above the 1.3100 handle.

Moving ahead, today's economic docket, highlighting the latest US consumer inflation figures and Canadian employment details, might now assist investors to determine the pair's next leg of directional move.

Technical levels to watch

Any subsequent up-move is likely to confront immediate resistance near the 1.3140-50 region, above which the pair is likely to aim towards reclaiming the 1.3200 handle before eventually darting towards its next major hurdle near the 1.3265-70 supply zone.

On the flip side, weakness back below the 1.3100-1.3090 area now seems to find strong support near mid-1.3000s, which if broken might turn the pair to break below the 1.30 handle and head towards retesting 100-day SMA support near the 1.2965 region.

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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