USD/CAD hits supply on the come back and stablizes at 1.3080, headed to 1.33?

USD/CAD has reversed the losses from 1.3004 and hit highs of 1.3114 before supply took the pair back to 1.3086 where spot is stabilizing at time of writing.

"Strengthening in tandem with most of its G10 peers in an environment of broad-based USD weakness," explained analysts at Scotiabank who suggested that broader developments are dominant and domestic risk is limited ahead of Friday’s trade and employment releases, leaving the focus centered on the market tone and its impact on oil prices and the broader USD. However, oil has tanked today from $40.83 down to $39.24 lows, although such downside is partially offset by support from relatively narrow yield spreads (U.S.-Canada 2Y slightly wider than 10bpts).

USD/CAD levels

The analysts at Scotiabank explained that the broader, multi-month technical picture remains bullish as they consider the sequence of higher lows from May and USD/CAD’s recent test of fresh multi-month highs. "We look to gains toward 1.33 and 1.35."