USD/CAD breaches 1.3200 post –data

The greenback has now lost upside momentum vs. its Canadian peer, dragging USD/CAD back to sub-1.3200 levels.

USD/CAD trims gains on data

CAD gathered extra attention after Canadian trade deficit shrunk more than expected during August, while US trade deficit has widened above consensus by nearly $41 billion during the same period.

The data added to the poor ADP figures for the month of September (154K), collaborating with USD-weakness.

Later in the session, US Factory Orders and the Services sector gauges by Markit and the ISM will remain in the limelight ahead of the EIA’s weekly report on crude oil inventories.

CAD is deriving extra support from the continuation of the bid tone in crude oil prices, taking the barrel of West Texas Intermediate to levels above the $49.00 mark following Tuesday’s unexpected draw in US crude stockpiles by 7.6 million barrels according to the API’s report.

In the meantime, crude oil dynamics remain the almost exclusive driver of CAD, taking the US-CA 2y spread differential to the passenger’s seat, while speculators have re-positioned on the short side of CAD during the week ended on September 27.

USD/CAD significant levels

As of writing the pair is up 0.01% at 1.3192 facing the next resistance at 1.3276 (high Sep.27) ahead of 1.3311 (38.2% Fibo of the 2016 drop) and finally 1.3575 (50% Fibo of the 2016 drop). On the other hand, a breach of 1.3137 (20-day sma) would open the door to 1.2996 (low Sep.22) and then 1.2818 (low Sep.7).