- Loonie outperforming AUD and NZD, remains supported by USMCA and higher crude oil price.
- USD/CAD moving sideways, between 1.2850 and 1.2805.
The USD/CAD pair rose after the release of the ADP employment report but found resistance below 1.2850 and pulled back. As of writing was hovering around 1.2820/30, at the same level it closed yesterday.
The ADP report showed better-than-expected numbers (230K vs 185K) and boosted the greenback. Another factor supporting it were US yields. The 10-year surged from 3.06% to 3.12%, to test 2018 highs. The US Dollar Index was rising for the sixth-day in-a-row, hovering above 95.60. Despite all, USD/CAD was moving sideways on Wednesday with a bullish bias.
The Loonie was the top performer among commodity currencies. USD/CAD moved all day between 1.2850 and 1.2805 while AUD/USD and NZD/USD fell to weekly lows. The Canadian dollar was holding to most of the gains that followed the trade deal with the US and also was being supported by higher crude oil prices.
Technical levels to consider
USD/CAD continues to consolidate in the mentioned range and still near the 3-month low it reached on Monday at 1.2780. The 1.2800/05 area has become a strong intraday support and a break lower could expose 1.2780. On the upside, immediate resistance is seen at 1.2840/45 (daily high), followed by 1.2905 and 1.2950.
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