USD/CAD prints fresh 4-week highs as USD strengthens and crude oil slides
- The US Dollar remains strong in the market supported by Treasury yields.
- Crude oil prices reversed sharply affecting the CAD.
The USD/CAD pair rebounded at 1.2805 and climbed to 1.2872 during the US session, reaching a fresh 4-week high. As of writing it is at 1.2860, up 50 pips for the day. It is headed toward the fifth daily gain in-a-row and is pointing toward November lows near the 1.2900 area.
A stronger US dollar and a slide in crude oil prices pushed the pair to the upside. Janet Yellen testimony at a Congress committee showed optimist on the US and the global economy and boosted the greenback. The US Dollar received another support from US Q3 GDP data that showed the highest annual growth rate in three years.
Yellen testimony: Its puzzling why inflation has been falling this year
Crude oil prices are having a volatile session. The WTI rose to $58.30 a barrel but only to bounce back to the downside. It was trading at daily lows under $57.50. The reverses in crude oil prices weakened the loonie.
Another factor that favors the upside on Wednesday, continues to be the spread differential between US and Canadian bonds. Today US yields are rising significantly.
USD/CAD Levels to watch
To the upside, the immediate resistance is seen at 1.2875 (Nov 29 high), followed by the 1.2900 zone (Nov highs) and 1.2920 (Oct 27 high). A daily close above 1.2900 would point to more gains ahead. To the downside, the FXStreet's technical confluence indicator identifies potential supports at 1.2805, 1.2765 and 1.2740.