USD/CAD upside faltered above 1.2400, attention to Poloz

The Canadian Dollar is extending the weekly downside vs. its American neighbor today, with USD/CAD hovering over the 1.2390/1.2400 band ahead of the speech by BoC’s S.Poloz.

USD/CAD focus on BoC

Spot is advancing for the third week in a row so far, gaining nearly 3% since fresh 2017 lows in the 1.2060 region seen earlier in the month. The positive streak, however, seems to have found strong resistance just above the 1.2400 handle despite the solid pace of the buck.

CAD has been trading on the defensive in past sessions despite the ongoing rally in crude oil prices, with the barrel of West Texas Intermediate trading in the upper end of the recent range around/above the $52.00 mark.

Traders, instead, appear more focused on yield spread differentials between the Canadian and US money markets as the main driver for the pair’s price action.

In the US docket, durable good orders surpassed expectations during last month, while pending home sales are next on tap.

In addition, FOMC’s L.Brainard (permanent voter, dovish), Minneapolis Fed N.Kashkari (voter, dovish), St. Louis Fed J.Bullard (2019 voter, dovish) and Boston Fed E.Rosengren (2019 voter, centrist) are due to speak later in the NA session.

On the CAD-side, Governor S.Poloz will speak on “The Meaning of “Data Dependence”: An Economic Progress Report”, followed by a press conference. 

USD/CAD significant levels

As of writing the pair is gaining 0.23% at 1.2382 facing the next up barrier at 1.2413 (high Sep.27) seconded by 1.2469 (23.6% Fibo of the 2017 drop) and finally 1.2482 (55-day sma). On the downside, a drop below 1.2303 (10-day sma) would aim for 1.2200 (low Sep.20) and then 1.2119 (low Sep.15).