USD/CAD surges to 1.2400 neighborhood, turns positive for the week

The USD/CAD pair turned positive for the week and jumped back closer to the top end of its weekly range following today's stellar US jobs data.

The US Dollar accelerated its recovery move and strengthened across the board after the latest US employment details showed jobs growth climbed more than expected in January, with wages increasing further to record their largest annual growth in over 8-1/2 years. 

Today's upbeat wage growth data bolstered expectations that inflation will push higher in the coming month and reaffirmed prospects for at least three Fed rate hike move in 2018. The same was evident from a sharp upsurge in the US Treasury bond yields and eventually triggered a short-covering rally around the major.

Meanwhile, a sudden turnaround in crude oil prices was also seen denting demand for the commodity-linked currency - Loonie and further collaborated to the pair's strong up-move of around 120-pips from session lows.

Technical levels to watch

Immediate resistance is pegged near the 1.2390-1.2400 region, above which a fresh bout of short-covering is likely to accelerate the move towards 1.2435 supply zone. On the flip side, 1.2340 level now seems to protect the immediate downside, which if broken could drag the pair back towards the 1.2300 handle.