USD/CAD spikes to fresh session tops, around mid-1.2700s
• Once again manages to rebound from the 1.2700 handle.
• Resurgent USD demand help offset bullish oil prices.
The USD/CAD pair snapped four consecutive days of losing streak and has now recovered majority of previous session's slide to 2-week lows.
The pair once again managed to find some fresh buying interest near the 1.2700 handle and was now being supported by resurgent US Dollar. A modest pickup in the US Treasury bond yields helped offset concerns over the Republicans tax bill and underpinned the greenback demand.
Meanwhile, traders seemed to have largely ignored a strong follow-through bullish momentum in oil prices. In fact, WTI crude oil spiked to fresh 2-1/2 year highs but did little to lend any support to the commodity-linked currency - Loonie, with the USD price dynamics turning out to be an exclusive driver of the pair's strong recovery move to mid-1.2700s.
In the absence of any major market moving economic releases, investors focus on Tuesday would remain on speeches by the BOC Governor Stephen Poloz and the Fed Chair Janet Yellen, scheduled later during the NY trading session.
Technical levels to watch
A follow-through buying interest beyond 1.2780 area (Monday's high) has the potential to lift the pair beyond the 1.2800 handle towards its next hurdle near the 1.2845-50 region.
On the downside, the 1.2700 handle remains a key support to defend, which if broken would turn the pair vulnerable to extend its corrective slide towards 200-day SMA support near the 1.2615-10 region.