• USD losses some ground after Harker’s comments.
• Modest rebound in oil prices further capping gains.
• FOMC meeting minutes hold the key.
The USD/CAD pair broke out of its European session consolidation phase and touched a fresh 1-1/2 week tops, around the 1.2675-80 region.
The US Dollar built on its strong recovery move, despite a subdued action around the US Treasury bond yields, and remained supportive of the pair's up-move through the early NA session. Even a modest rebound in crude oil prices, which tends to benefit the commodity-linked currency - Loonie, failed to stall the pair's ongoing bullish momentum.
Today's up-move could also be attributed to fresh technical buying, especially after yesterday's bullish breakthrough 100-day SMA important barrier, near the 1.2620-25 region. With today's up-move, the pair has now added nearly 250-pips from last Friday's swing low near mid-1.2400s.
The pair, however, lost some ground and failed ahead of the 1.2700 handle after the latest comments by the Philadelphia Fed President Patrick Harker, who was noted saying that two rate hikes this year are likely to appropriate.
It would now be interesting to see if bulls are able to maintain their dominant position as traders now start repositioning for the upcoming release of the FOMC meeting minutes, which would drive Fed rate hike expectations and eventually drive the pair in the near-term.
Technical levels to watch
Bulls would be eyeing for a clear breakthrough the 1.2700 handle, above which the pair seems all set to aim towards testing the key 200-day SMA barrier near the 1.2720-25 region. On the flip side, immediate support is pegged near 1.2645 level, which if broken could drag the pair back towards the 1.2600 round figure mark.
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