USD/CAD looks to extend the bounce to 1.3080

The greenback is marginally up vs. its Canadian neighbor on Thursday, taking USD/CAD to the 1.3075/80 band, or daily tops.

USD/CAD supported near 1.3050

The pair is suffering the increased selling pressure around the buck this week, coming down from Friday’s tops in the boundaries of 1.3400 the figure to weekly lows in the mid-1.3000s seen yesterday.

USD stays broadly on the defensive as the Trump’s reflation trade continued to deflate – particularly since Trump took office and with dovish comments on the buck - dragging spot o multi-day lows and at the same time opening the door for a potential test of last week’s troughs in the 1.3000 neighbourhood.

CAD’s price action seems to have decoupled from crude oil dynamics as of late, prompting investors to look to the US-CA money markets as catalysts instead and bringing to the fore the policy divergence between the Fed and the BoC.

Nothing scheduled data wise in Canada today, whereas the usual weekly report on the labour market, Trade Balance figures and New Home Sales are all due in the US docket.

USD/CAD significant levels

As of writing the pair is gaining 0.06% at 1.3078 facing the next resistance at 1.3118 (200-day sma) followed by 1.3167 (high Jan.25) and finally 1.3231 (20-day sma). On the flip side, a breach of 1.3053 (low Jan.25) would aim for 1.3016 (low Jan.17) and then 1.3002 (low Oct.19).