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USD/CAD retreats from tops above 1.2800

  • Spot clinches fresh 5-day tops above 1.2800.
  • US-CA yield spreads keeps driving sentiment.
  • FOMC’s Powell in the limelight later in the session.

The greenback is extending its upside momentum vs. its Canadian peer on Tuesday, with USD/CAD climbing to fresh multi-day tops in the 1.2800 neighbourhood.

USD/CAD attention is now on Powell, Poloz

The pair is pushing higher on Tuesday and is prolonging the rally beyond 1.2800 the figure backed by the persistent widening in US-CA yield spread differentials, particularly in the shorter end of the curve.

All the attention around the buck keeps gyrating around the future steps of the US tax reform proposed by the White House, with President Trump expected to meet with Senate Republicans later today ahead of the Senate tax bill vote initially due on Thursday.

In addition, spot should remain under scrutiny in light of the upcoming speech by next Fed Chief J.Powell and the press conference by BoC’s Governor S.Poloz and Deputy Governor C.Wilkins, also expected later in the session.

USD/CAD significant levels

As of writing the pair is gaining 0.16% at 1.2792 facing the initial hurdle at 1.2807 (high Nov.28) seconded by 1.2838 (high Nov.21) and finally 1.2927 (50% Fibo of the 2017 drop). On the other hand, a breach of 1.2661 (low Nov.23) would open the door to 1.2589 (55-day sma) and then 1.2564 (100-day sma).

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