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USD/CAD tumbles to lows near 1.2650

  • CAD in 6-week lows near 1.2650.
  • BoC seen unchanged this week.
  • CA 2-year yields in 2-month tops.

The Canadian Dollar is gathering extra traction at the beginning of the week, dragging USD/CAD to the area of fresh multi-week lows in the mid-1.2600s and finding some support around those levels for the time being.

USD/CAD faces support near 1.2630, 55-day sma

CAD is adding to Friday’s gains in response to an impressive jobs report in the Canadian economy during November, forcing spot to trade in the key support area in the 1.2660/70 band.

The pair is deriving strength from US-CA yield spread differentials in the shorter end of the curve, where the Canadian 2-year reference briefly tested the 1.56% area earlier in the session, levels last seen in early October.

In the data space, US factory orders for the month of October are next on tap. In Canada, trade balance figures are due tomorrow ahead of the key BoC meeting expected to Wednesday.

USD/CAD significant levels

As of writing the pair is losing 0.02% at 1.2683 facing the initial down barrier at 1.2656 (low Dec.4) seconded by 1.2631 (55-day sma) and then 1.2568 (100-day sma). On the other hand, a break above 1.2750 (21-day sma) would aim for 1.2761 (10-day sma) and finally 1.2849 (low Nov.30).

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