The USD/CAD pair reversed an early dip to two-week lows, near the 1.2430 region, and refreshed session tops on upbeat US economic releases.
The US Dollar‘s steady rebound since early European session got an additional boost from today’s better-than-expected US macro data, especially PPI figures, which recorded the biggest gain since February 2012.
Adding to this, a lower than expected rise in Canadian New Housing Price Index (NHPI), +0.1% m-o-m as against 0.3% increase expected, coupled with a sharp fall in oil prices was also seen weighing on the Canadian Dollar.
Weaker crude oil prices tends to dent demand for the commodity-linked currency – Loonie and lifted the pair back closer to the key 1.2500 psychological mark.
Further upside, however, remained capped amid persistent weaker tone around the US Treasury bond yields, which remained on the back-foot in wake of yesterday’s perceived dovish FOMC meeting minutes.
Traders now look forward to speeches by the Fed Governors Lael Brainard and Jerome Powell, due to speak at a panel discussion in Washington DC in a short while from now, in order to grab some short-term opportunities.
Technical levels to watch
A convincing move beyond the 1.25 handle could get extended towards 1.2560 intermediate resistance before the pair eventually darts towards conquering the 1.2600 round figure mark.
On the downside, weakness back below mid-1.2400s would now turn the pair vulnerable to aim towards testing the 1.2400 handle, with some intermediate support near the 1.2425-20 region.