USD/CAD clinches tops near 1.2550 ahead of Evans, EIA
- Spot is visiting daily tops near 1.2550.
- USD remains bid, targets 90.00.
- FOMC’s Dudley, EIA next on tap.
The greenback is trading in daily highs vs. its Canadian neighbour on Wednesday, taking USD/CAD to the mid-1.2500s and closer to weekly tops near 1.2560 seen on Tuesday.
USD/CAD focused on Dudley, EIA report
The pair reverted Tuesday’s drop and has recovered the upside momentum backed by a solid performance from the greenback and a rebound in yields of the US 10-year note.
Adding to CAD undertone, the barrel of West Texas Intermediate is extending the weekly downside, so far finding support around daily lows in sub-$63.00 levels ahead of the weekly report on US crude oil stockpiles by the DoE.
Furthermore, US-CA yield spread differentials keep benefiting the buck for the time being, with yields of the US 10-year reference currently around 2.80%, around 9 bp lower than Monday’s multi-year peaks above 2.88%.
Other than the EIA’s report, Chicago Fed C.Evans (2019 voter, centrist) is due to speak. In Canada, building permits expanded above estimates 4.8% MoM in December. The next risk event in the Canadian docket will be the speech by BoC’s C.Wilkins tomorrow.
USD/CAD significant levels
As of writing the index is gaining 0.32% at 1.2532 facing the immediate up barrier at 1.2567 (high Feb.6) followed by 1.2600 (55-day sma) Jan.30) and finally 1.2722 (38.2% Fibo of the 2017 drop). On the other hand, a breach of 1.2469 (23.6% Fibo of the 217 drop) would open the door to 1.2423 (21-day sma) and then 1.2395 (10-day sma).