USD/CAD trims gains, back near 1.2720
- Upside lost momentum near 1.2760.
- US-CA yield spreads continue to rule sentiment.
- US producer prices, Fedspeak next on tap.
The greenback has given away its initial gains vs. its Canadian counterpart on Tuesday, prompting USD/CAD to retreat from daily highs near 1.2760 to the current area around 1.2725/20.
USD/CAD focused on Fedspeak, US data
The pair met some selling pressure around daily highs today and is now struggling for direction in the 1.2720 area, looking to extend the up move seen at the beginning of the week.
In the meantime, US-CA yield spreads differentials continue to drive the sentiment around the pair, with both 10-year benchmarks hovering over monthly peaks around 2.40%/41% and 1.97%/98%, respectively.
Looking ahead, St. Louis Fed J.Bullard (2019 voter, centrist) and Atlanta Fed R.Bostic (2018 voter, centrist) are due to speak later in the NA session, along with October producer prices. In Canada, the most relevant event will be Friday’s inflation figures for the month of October.
USD/CAD significant levels
As of writing the pair is down 0.09% at 1.2721 facing the initial support at 1.2664 (low Nov.10) seconded by 1.2584 (100-day sma) and then 1.2469 (23.6% Fibo of the 2017 drop). On the other hand, a break above 1.2821 (high Nov.7) would open the door to 1.2918 (high Oct.27) and finally 1.2927 (50% Fibo of the 2017 drop).