USD/CAD surges to one week high post data

The greenback continued scaling higher across the board, lifting the USD/CAD pair to one-week highs in the 1.2570 region. 

The pair built on overnight recovery move from 4-week lows and caught some fresh bids on upbeat US macro data. The ADP report showed private sector employers added, much higher than expected, 237K new jobs in August, while the second estimate of US Q2 GDP growth was also revised higher to 3.0% annualized growth from the initially reported 2.6%. 

Meanwhile, the Canadian Dollar was also being weighed down by domestic data, showing current account deficit widened by $3.4 billion to $16.3 billion in the second quarter. This coupled with weaker crude oil prices, which tends to dent demand for the commodity-linked currency - Loonie further collaborated to the pair's uptick during early NA session.

With the key macro data out of the way, broader market sentiment around the US Dollar and oil price dynamics would influence the pair's movement through the rest of Wednesday's trading session.

Technical levels to watch

From current levels, the 1.26 handle is likely to act as immediate resistance, above which a fresh bout of short-covering could lift the pair towards the 1.2675-80 region with some intermediate resistance near 1.2640-45 area.

On the flip side, 1.2550 level now seems to act as immediate support, which if broken is likely to accelerate the slide back towards the key 1.25 psychological mark.