Having retreated to 1.3680 level during mid-European session, the USD/CAD pair regained traction and surged through mid-1.3700s following the release of US macro data.
Spot caught strong bids after data released from the latest US PPI release showed the price of finished goods and services sold by producers rose at the fastest yearly pace since Feb. 2012. In fact, the headline PPI jumped 2.5% y-o-y, while excluding food & energy core PPI climbed 1.9% on yearly basis.
In addition to this, the US Dollar got an additional boost from better-than-expected initial jobless claims, coming-in at 236K for the week ended May 5 as against 245K anticipated and last week’s 238K.
Meanwhile, market seems to have largely ignored the in-line with estimate release of New Housing Price Index (NHPI) from Canada, with the greenback price-dynamics acting as exclusive driver of the pair’s up-move during early NA session.
However, the prevalent positive sentiment surrounding oil markets, with WTI crude oil holding with strong gains near $48.00/barrel mark, extended some support to the commodity-linked currency – Loonie, with the pair quickly reversing around 50-pips from session tops.
Technical levels to watch
A follow through retracement back below 1.3715 level could drag the pair back below the 1.3700 handle towards testing 1.3680 intermediate support, en-route weekly lows support near 1.3650-45 zone.
Conversely, sustained momentum back above mid-1.3700s should accelerate the up-move back towards 1.3770 resistance area before the pair eventually aims to surpass the 1.3800 handle.