USD/CAD deflates from highs post-data, back below 1.3200

The upside momentum around USD/CAD seems to have run out of fuel above the 1.3200 handle today, now receding to the 1.3180/75 band.

USD/CAD rally capped above 1.3200

The pair still stays unable to sustain a break above 1.3200 the figure for the time being, although the weekly upside and the solid recovery of the greenback appears intact.

Spot remained apathetic after positive results from the Canadian and US trade balance figures. In fact, Canadian trade surplus has widened to $0.92 billion in December, while US trade deficit shrunk more than expected to $44.30 billion during the same period.

Further data saw Canadian Building Permits contracting more than initially estimated 6.6% on a monthly basis in December.

Today’s up move has also find support in widening yield spreads from the US and Canadian money markets, particularly in the shorter end of the curve. On the crude oil side, the barrel of WTI is still in the red territory, losing smalls in the $52.70 area.

CAD remains supported by speculative positioning at the same time, with net longs climbing to the highest level since late September in the week to January 31, according to the latest CFTC report.

USD/CAD significant levels

As of writing the pair is gaining 0.66% at 1.3167 facing the next hurdle at 1.313 (high Feb.7) followed by 1.3282 (55-day sma) and finally 1.3311 (38.2% Fibo of the 2016 drop). On the other hand, a breach of 1.3004 (low Feb.6) would expose 1.2977 (low Feb.2) and then 1.2967 (low Jan.31).