USD/CAD flirting with session highs near 1.2600

The greenback is trading on the firm note vs. its Canadian peer on Wednesday, pushing USD/CAD to test daily highs in the boundaries of the key barrier at 1.2600 the figure.

USD/CAD focus on US data, EIA

Spot keeps the tight range during the first half of the week although it manages to advance for the second consecutive session so far, reverting yesterday’s brief test of the 1.2520 region.

In the meantime, CAD is deriving further weakness from the softer tone in the Canadian yields of the 10-year reference, which is testing session lows around the 1.90% mark. Yields spread differential between the US and Canadian money markets have been key in driving the sentiment around the Loonie as of late.

In addition, the barrel of West Texas Intermediate is posting decent losses around $47.70 ahead of the EIA’s weekly report on US crude oil inventories, adding to the selling bias around CAD.

USD/CAD significant levels

As of writing the pair is gaining 0.21% at 1.2590 and a breakout of 1.2609 (21-day sma) would expose 1.2650 (10-day sma) and finally 1.2738 (23.6% Fibo of the 2017 drop). On the other hand, the immediate support emerges at 1.2522 (low Aug.22) seconded by 1.2412 (2017 low Jul.27) and then 1.2124 (low Jun.18 2015).