USD/CAD clings to gains near 1.3200, ADP eyed

The greenback is extending its upbeat momentum vs. its Canadian neighbour on Wednesday, with USD/CAD up smalls and around the 1.3200 handle.

USD/CAD looks to data, oil

Spot has now faded part of Tuesday’s strong advance to daily tops in the vicinity of the key 200-day sma near 1.3220, although it so far manages to remain close to the 1.3200 handle early in the European morning.

The recovery in crude oil prices was reinforced by an unexpected draw in US crude stockpiles of 7.6 million barrels according to yesterday’s report by API, pushing the barrel of West Texas Intermediate above the $49.00 mark and lending support to CAD.

Later in the session, US ADP report is expected to show the private sector has added 166K jobs during September, along with trade balance figures, Factory Orders and the ISM Non-manufacturing.

Ahead in the week, the pair will remain under scrutiny in light of Wednesday’s report by the EIA and Friday’s labour market figures in Canada along with US Non-farm Payrolls. In addition, Senior Deputy Governor C.Wilkins is due to speak on Wednesday and Friday while the BoC will publish its Business Outlook Survey on Friday.

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 0.03% at 1.3195 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).