USD/CAD rebounds in Asia, 1.3100 – a whisker away

The Asian recovery in USD/CAD appears to have gained traction as we head towards early Europe, mainly driven by a pick-up in buying interest seen around the greenback.

USD/CAD nears 5-DMA

Currently, the USD/CAD pair advances +0.44% to fresh session highs at 1.3091, having staged a solid comeback in the Asian session from just ahead of 1.30 handle. The bulls are back in action as higher treasury yields buoy the sentiment around the US dollar versus its main peers. The USD index is on a gradual recovery mode from 11-week lows of 99.40, and now trades +0.16% higher at 99.70 levels.

Moreover, overnight sell-off in oil, following a big inventory build across the board, dampens the bids for the resource-linked Loonie, sending USD/CAD sharply higher. While markets look past upbeat Canadian GDP figures, which expanded by 0.4% and swung back to growth in November.

Markets now eagerly await the US EIA crude inventory report, US ADP jobs, ISM PMI and FOMC due later in the NA session for fresh impetus on the CAD pair.

USD/CAD Technical Levels   

To the upside, the next resistances are seen near 1.3138 (10-DMA) and 1.3165 (20-DMA) and from there to 1.3200 (zero figure). To the downside, immediate support might be located at 1.3041 (daily pivot) and below that at 1.3011 (daily low) and at 1.2957 (daily S1).