USD/CAD jumps to 2-week tops, reclaims 1.26 handle

The USD/CAD pair traded with a positive bias for the fourth consecutive session and jumped to a two-week high during early European session on Thursday.

With the market looking past yesterday's weaker ADP report on the US private sector employment, the US Dollar index has managed to bounce off 15-month lows and supported the pair's recovery move from 25-month lows. 

Meanwhile, a mildly softer tone around crude oil prices did little to boost demand for the commodity-linked currency - Loonie and also seems to have prompted some short-covering move. 

Currently hovering around the 1.2600 handle, traders now look forward to today's US economic data - weekly jobless claims, ISM non-manufacturing PMI and factory orders data for some fresh impetus.

The key focus, however, would remain on Friday's important release of the US monthly jobs report (NFP), which would help determine the next leg of directional move for the major.

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Technical levels to watch

Immediate resistance is pegged near 1.2635 level, above which the recovery momentum could easily get extended towards the 1.2700 handle. On the flip side, any pull-back now seems to find immediate support near 1.2555-50 region, which if broken could drag the pair back towards the key 1.25 psychological mark ahead of 1.2480 horizontal support.