USD/CAD off highs, around 1.2830 ahead of US data

• The pair fades the spike to session tops near 1.2860.
• Weekly upside meets strong hurdle in the 1.29 neighbourhood so far.
• US Goods Trade Balance, Initial Claims and Durable Goods Orders coming up next.

After briefly testing the 1.2870 area, or daily peaks, USD/CAD has sparked a correction lower to the current 1.2835/30 band ahead of US data releases.

USD/CAD looks to yields, data

The pair is attempting a consolidative theme in the upper end of the recent range, with weekly gains so far limited by the 1.2900 neighbourhood recorded on Wednesday.

CAD remains vulnerable to the persistent uncertainty around the NAFTA talks, while the recent up move in US yields widened the spread vs. their Canadian peers, thus lending extra support to the buck.

In addition, the recent cautious tone from the Bank of Canada has also collaborated with the renewed selling bias around CAD, although markets seem to still factoring in a rate hike at the July meeting.

Later in the NA session, US Initial Claims is due followed by March’s Durable Goods Orders and Goods Trade Balance figures.

USD/CAD significant levels

As of writing the index is losing 0.12% at 1.2829 facing the next support at 1.2779 (55-day sma) followed by 1.2722 (38.2% Fibo of the 2017 drop) and then 1.2626 (200-day sma). On the flip side, a breakout of 1.2899 (high Apr.25) would aim for 1.2927 (38.2% Fibo of the 2017 drop) and finally 1.2946 (high Apr.2).