USD/CAD around highs near 1.2520 ahead of Canadian inflation

The greenback is appreciating further vs. its Canadian counterpart at the end of the week, lifting USD/CAD to fresh tops in the vicinity of the 1.2520 area.

USD/CAD now looks to data

The pair remains sidelined in recent familiar ranges, with gains clearly capped by recent tops in levels just shy of 1.2600 the figure (October 17) and the lower end located around the low-1.2400s.

Price action around spot has been mostly ruled by US-CA yield spread differentials, particularly in the shorter end of the curve, while crude oil dynamics have been relegated as a secondary role for the time being.

In addition, NAFTA headlines were the ‘new kid on the block’ and promise to weigh on CAD in the upcoming months, always under the permanent threats by President Trump to terminate it. In this regard, the fifth round of negotiations are expected to kick in in Mexico City in early November.

Looking ahead, Canadian inflation figures tracked by the CPI will be the salient point later today along with the publication of August’s retail sales. In the US docket, existing home sales are next on tap.

USD/CAD significant levels

As of writing the pair is up 0.24% at 1.2515 facing the next up barrier at 1.2592 (high Oct.17) followed by 1.2599 (high Oct.6) and finally 1.2664 (high Aug.31). On the other hand, a breach of 1.2460 (55-day sma) would aim for 1.2431 (low Oct.12) and then 1.2253 (low Sep.22).