USD/CAD sits at multi-week tops, above mid-1.3300s as focus shifts to BoC decision

   “¢   The USD remains supported by the overnight upbeat economic data.
   “¢   Weaker oil prices undermine Loonie and provided an additional boost.
   “¢   Upside seemed capped ahead of the latest BoC monetary policy update.

The USD/CAD pair held on to its positive tone through the early European session and is currently placed at the top end of its daily trading range, or near six-week tops.

The pair built on last week’s strong up-move, led by disappointing Canadian GDP growth figures, with a combination of supporting factors helping the pair to continue gaining positive traction for the fifth consecutive session on Wednesday.

Against the backdrop of the recent upsurge in the US Treasury bond yields, the US Dollar was further supported by Tuesday’s better than expected economic releases – ISM non-manufacturing PMI and new home sales data and climbed to near two-week tops.  

The pair’s ongoing bullish momentum was further supported by the prevalent weaker tone surrounding crude oil prices – now down nearly 1% for the day, which tends to undermine demand for the commodity-linked currency – Loonie.  

Oil prices slipped further on Wednesday and continued to be weighed down by the overnight API report, which showed that US crude inventories rose significantly higher than expected by 7.3 million barrel last week to 451.5 million barrels.

Further gains, however, are likely to remain capped as traders might now be reluctant to place any aggressive bets ahead of today’s key event risk – the latest BoC monetary policy update, due to be announced later during the early North-American session.

In the meantime, the US economic docket, highlighting the release of ADP report on private sector employment, which might influence market expectations about the official NFP print on Friday, might also be looked upon for some short-term trading opportunities.

Technical levels to watch