USD/CAD upside stalled at 1.3450, back to 1.3410

The upside momentum in USD/CAD has run out of steam around session tops in the mid-1.3400s, returning to the current 1.3415/10 band soon afterwards.

USD/CAD weaker, oil weighs

Despite the greenback continues to cut earlier losses, the pair’s daily performance remains in the negative territory for the third session in a row, although buyers offered decent support in the 1.3400 neighbourhood for the time being.

The rebound in crude oil prices has motivated the West Texas Intermediate to retake the $46.00 mark and above per barrel following increasing optimism on a deal at the OPEC meeting later in the month, propping up some CAD momentum.

In the US data space, inflation gauged by the CPI rose more than expected on a monthly basis and gained 1.6% on a year to October, up from September’s 1.5%. Further auspicious results have come from the housing sector and the labour market, where Building Permits, Housing Starts and Initial Claims have all surpassed consensus.

At her testimony before the Joint Economic Committee, Chair J.Yellen said a rate hike could be appropriate ‘relatively soon’, while she sees inflation reaching the Fed’s target within a couple of years.

Later in the day, L.Brainard (permanent voter, dovish) and Chicago Fed C.Evans (2017 voter, dovish) are due to speak.

 USD/CAD significant levels

As of writing the pair is losing 0.26% at 1.3412 and a break below 1.3400 (low Nov.16) would aim for 1.3311 (38.2% Fibo of the 2016 drop) and then 1.3260 (low Nov.9). On the upside, the initial hurdle aligns at 1.3575 (50% Fibo of the 2016 drop) followed by 1.3590 (high Nov.14) and finally 1.3839 (61.8% Fibo of the 2016 drop).

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