USD/CAD deflates from 1.3400, Yellen eyed

The upside momentum in the greenback is taking a breather at the end of the week, with USD/CAD now receding to the 1.3385/80 band.

USD/CAD focus on data, Yellen

Spot is reverting a 4-session positive streak for the time being, as the rally seems to have found a strong resistance area around yesterday’s tops in the 1.3400 neighbourhood.

USD is fading part of the strong weekly advance after the closing bell in Asia today, as cautiousness ahead of the speech by Chief Yellen later in the NA session prompted investors to cash up some of the recent gains.

Increasing bets on a rate hike by the Federal Reserve at its meeting on March 15 sent US yields to multi-day tops, widening the spread vs. their Canadian peers and thus favouring the buck.

Looking ahead, US ISM Non-manufacturing will be the sole release today (56.2 exp.) along with speeches by Chicago Fed C.Evans (voter, dovish), Richmond Fed J.Lacker (2018 voter, hawkish), J.Powell (permanent voter, centrist), Vice Chairman S.Fischer (permanent voter, centrist) and the more relevant speech by Chief J.Yellen on ‘Economic Outlook’.

USD/CAD significant levels

As of writing the pair is losing 0.04% at 1.3386 facing the next support at 1.3320 (low Mar.2) ahead of 1.3311 (38.2% Fibo of the 2016 drop) and then 1.3285 (100-day sma). On the upside, a breakout of 1.3402 (high Mar.2) would aim for 1.3463 (high Jan.3) and finally 1.3575 (23.6% Fibo of the 2016 drop).