USD/CAD retreats from highs, back around 1.3200

The bid tone in the greenback now seems to be taking a breather, motivating USD/CAD to recede towards the 1.3200 neighbourhood.

USD/CAD focus on oil, US data

After reaching daily highs in the vicinity of 1.3240, the pair run out of upside momentum and has triggered the current correction lower, all amidst a solid performance of the buck in turn backed by rising speculations on a Fed’s rate hike by year-end.

The softer tone in crude oil prices has sent the barrel of West Texas Intermediate back to the $51.00 area from recent highs, posting marginal losses for the time being and somewhat capping gains in CAD.

In addition, USD found earlier support after Chicago Fed C.Evans advocated for a gradual tightening at today’s comments in Sydney, albeit he admitted that policy ‘may well be changing soon’.

In the data space, Canadian Housing Starts rose by 220.6K units during September, surpassing estimates and up from August’s 184.2K units.

Back to the US, the Fed’s Labor Market Conditions Index is next on tap followed by the speech by Minneapolis Fed N.Kashkari (2017 voter, neutral).

USD/CAD significant levels

As of writing the pair is advancing 0.16% at 1.3196 facing the next hurdle at 1.3314 (high Oct.7) followed by 1.3575 (50% Fibo of the 2016 drop) and finally 1.3839 (61.8% Fibo of the 2016 drop). On the other hand, a breach of 1.3067 (55-day sma) would open the door to 1.2996 (low Sep.22) and then 1.2818 (low Sep.7).