USD/CAD eases to daily lows near 1.3530, US data eyed

After climbing to fresh multi-month tops just below the 1.3600 handle, USD/CAD has now deflated to the 1.3530 area along with a weaker greenback.

USD/CAD lower ahead of US data, API

The pair is posting losses for the first time after four consecutive advances today, as market participants seem to be cashing up part of the recent strong gains in the buck.

In fact, the rally in USD is taking a breather after the UD Dollar Index reached fresh 1-year tops on Monday beyond the critical barrier at 100.00 the figure. As being the case since Trump’s victory, expectations of a Fed’s rate hike, reflation prospects and higher yields in the US money markets remain behind the upside momentum in USD.

On the CAD-side, declining crude oil prices continue to be a drag for the currency, as the barrel of West Texas Intermediate tested the low-$42.00s on Monday, just to pick up some pace afterwards.

Later in the session, US Retail Sales are due followed by the weekly report on crude oil stockpiles by the API and the speech by FOMC’s S.Fischer (permanent voter, hawkish).

Regarding positioning, CAD speculative net shorts rose to the highest level since mid-March during the week ended on November 8, according to the latest CFTC report.

USD/CAD significant levels

As of writing the pair is retreating 0.18% at 1.3538 facing the next support at 1.3506 (low Nov.14) followed by 1.3382 (20-day sma) and then 1.3311 (38.2% Fibo of the 2016 drop). On the other hand, a breakout of 1.3590 (high Nov.14) would aim for 1.3839 (61.8% Fibo of the 2016 drop).