USD/CAD leaps to fresh tops near 1.2550

A bout of buying interest around the buck is now pushing USD/CAD to the area of daily peaks in the mid-1.2500s.

USD/CAD in 5-week tops

The pair climbed further after US initial claims surprised markets to the upside, rising to 260K WoW vs. 265K initially estimated and 272K seen in the previous week. In the Canadian docket, August’s trade balance figures showed a wider than expected deficit of $3.41 billion.

In the meantime, CAD is ignoring the positive performance of the barrel of West Texas Intermediate, reverting the recent negative streak and regaining the $50.00 mark and above at the time of writing.

Instead, the pair seems to look to the US-CA yields spread differential, where the US 10-year benchmark is now hovering over the area of daily highs around 2.34%.

Supporting USD momentum, San Francisco Fed J.Willlams said inflation is heading towards the 2% target and that the Fed remains able to hike.

Looking ahead, August’s factory orders are next on tap seconded by speeches by FOMC’s Philly Fed P.Harket (voter, hawkish) and KC Fed E.George (2019 voter, hawkish).

USD/CAD significant levels

As of writing the pair is gaining 0.51% at 1.2542 facing the next up barrier at 1.2664 (high Aug.31) seconded by 1.2722 (38.2% Fibo of the 2017 drop) and finally 1.2786 (100-day sma). On the downside, a drop below 1.2443 (10-day sma) would aim for 1.2414 (low Sep.29) and then 1.2322 (21-day sma).