USD/CAD reverses and rises sharply above 1.2700
- US Dollar turns to the upside and erases losses.
- DXY rebounds from 2-month lows, in positive territory for the day.
- USD/CAD at highest since last Wednesday.
The US dollar rallied during the American session while the Loonie lost strength and pulled back. The USD/CAD pair rose almost a hundred pips from 1.2680 to 1.2769. At the moment of writing, it was trading at 1.2755/60, up 50 pips from Friday’s close.
The slide in crude oil prices was a factor behind loonie’s weakness. The WTI is at $58.10 a barrel, down 1.40% for the day. The US Dollar Index dropped to 92.38, the lowest in two months earlier but then bounced to the upside and erased losses. Near the end of the session, DXY was marginally higher for the day at 92.80.
The combination boosted the USD/CAD pair that is rising for the third day in a row, however, it accelerated the up-move today. The greenback was having the best day in two weeks versus the loonie.
The week in Canada will be busy. Among the main events, Bank of Canada’s Financial System Review report is due on Tuesday and on Friday, GDP data and the jobs report. In the US, tomorrow, Jerome Powell, the nominee to replace Janet Yellen, will be at Senate Banking Committee for the confirmation hearing.
USD/CAD was hovering around the 20-day moving average near 1.2760, a consolidation significantly above could improve the technical outlook. To the upside, resistance levels might be seen at 1.2785, 1.2820 (Nov 17 high) and 1.2835 (Nov 21 high). On the flip side, the FXStreet's technical confluence indicator identifies support at 1.2730, 1.2700 and 1.2650.