USD/CAD eases from tops near 1.2840, US data, Poloz on sight
- The pair’s recovery stalled ahead of the 1.2840 area.
- The greenback is picking up pace above the 90.00 mark.
- Investors keep the focus on NAFTA, tariffs, BoC.
The Canadian Dollar is giving away part of Friday’s gains and is now helping USD/CAD to advance to the area of daily peaks in the 1.2835/40 band.
USD/CAD attention to BoC
The pair is bouncing off Friday’s multi-day lows in the 1.2800 neighbourhood against the backdrop of a better tone around the greenback while the up move in the risk-associated space seems to be losing momentum.
CAD gained extra buying interest in tandem with the pick up in the sentiment surrounding the riskier assets, all after February’s US Non-farm Payrolls showed a strong job creation although a down tick in wage inflation.
In the meantime, CAD remains in the middle of the debate between a cautious/dovish approach from the Bank of Canada – despite market consensus has almost priced in a rate hike in July – the probable cooling of the economy and its implications on the GDP, the still inconclusive negotiations around the NAFTA and what’s next after the recently announced 30-day exemption from the imposition of US tariffs on steel and aluminium.
Furthermore from CAD sees CAD speculative net longs dropped to the lowest level since January 16 according to the latest CFTC report in the week to March 6.
In the data space, US CPI and Retail Sales are due next (Tuesday and Wednesday, respectively), while Governor S.Poloz is due to speak tomorrow ahead of January’s Manufacturing Sales in the Canadian economy (Friday).
USD/CAD significant levels
As of writing the index is advancing 0.16% at 1.2831 facing the next up barrier at 1.2862 (10-day sma) seconded by 1.2927 (50% Fibo of the 2017 drop) and finally 1.3001 (2018 high Mar.5). On the downside, a breach of 1.2803 (low Mar.12) would target 1.2722 (38.2% Fibo of the 2017 drop) en route to 1.2667 (200-day sma).
