USD/CAD clocks fresh yearly tops near 1.3150 on USD strength
- Bulls take-out 1.3150 barrier amid persistent broad USD demand.
- Will the rally sustain ahead of the US industrial output and Canadian manufacturing data?
The USD/CAD pair built on its yesterday’s extensive rally and reached the highest levels since June 2017 just ahead of the 1.3150 mark, in the wake of the ongoing rally in the US dollar across its main competitors.
The greenback continues to remain broadly underpinned by the Fed’s hawkish rate hike that underscores the monetary policy divergence between the Fed and its global peers. The USD index gains +0.37% to test the November 2017 highs at 95.15.
Meanwhile, the Canadian remains weighed down by the latest comments from the Bank of Canada (BOC) Senior Deputy Governor Wilkins, as she noted that the US tariffs on Canada are not good news and its effect on the consumer prices are yet to be evaluated.
Also, listless trading seen around oil prices also failed to offer any support to the resource-linked Loonie. Both crude benchmarks trade on the defensive heading into the OPEC meeting scheduled on June 22nd in Vienna. Saudi Arabia and Russia are said to propose output boost at the meeting.
In the meantime, the focus remains on the upcoming US industrial production data and Canda’s manufacturing sales report for fresh trading impetus.
USD/CAD Technical Levels
Melina Deltas, CFTe and Investment Analyst at XM notes key technical levels for the Loonie: “Should the market extend gains above the 61.8% Fibonacci, this would send prices towards the return line of the upward sloping channel, near the 1.3200 handle. A climb above the pattern would suggest a stronger bullish structure and challenge the 1.3350 resistance level, taken from the high on June 2017. Conversely, the next support should come from the 1.3050 before being able to retest the 50.0% Fibonacci mark of 1.2930. A dip below this region would drive the price towards the 40-SMA near 1.2840 at the time of writing. Further losses could drive the pair until the 38.2% Fibonacci of 1.2720.”