USD/CAD sits at fresh 4-week tops, just below mid-1.2700s
The USD/CAD pair was seen building on the recent recovery move and is currently placed in the region of fresh 4-week tops, around 1.2735 level.
The pair traded with a positive bias for eight trading session in the previous nine and has now recovered over 300-pips from 25-month lows touched on July 31. A goodish US Dollar recovery has been one of the key factors driving the pair higher through early European session on Thursday.
Growing prospects for additional Fed rate hike action by the end of this year, especially after Friday's stronger NFP report and the latest JOLTS job openings data, underpinned the greenback demand. Adding to this, reviving hopes of a pickup in the US inflationary pressure following a big upward revision of the Q1 unit labor costs on Wednesday remained supportive of the positive tone surrounding the greenback.
Meanwhile, the market largely ignored Wednesday's upbeat Canadian building permits data for June, and higher revision of gains in May, with broad based greenback recovery acting as an exclusive driver of the pair's up-move through early NA session. Even an uptick in crude oil prices, which tends to benefit the commodity-linked currency - Loonie, did little to stall the pair's ongoing up-move to the highest level since July 14.
Today's US economic releases - weekly jobless claims and PPI, are unlikely to hinder the pair's near-term bullish trajectory as the focus would remain on Friday's US CPI print, which would influence Fed rate hike expectations and help determine the next leg of directional move for the major.
Technical levels to watch
From current levels, sustained momentum above mid-1.2700s is likely to lift the pair beyond the 1.2800 handle towards its next major hurdle near the 1.2870 region. On the flip side, any pull-back below the 1.2700 mark now seems to find some fresh buying interest near the 1.2670-60 region, below which the pair could drop back towards the 1.2600 handle en-route 1.2545 strong horizontal support.