USD/CAD sits at session tops, eyeing a move beyond 1.25 mark
• USD stalls China report-led sharp downslide.
• Weaker Canadian data lends additional support.
• Bullish oil /imminent BOC rate hike might cap gains.
The USD/CAD pair quickly reversed a mid-European session dip to the 1.2430-25 region and refreshed session tops in the last hour of trading.
The pair extended its steady recovery move from last Friday's over 3-month lows and caught some fresh bids following today's disappointing Canadian data that showed the value of building permits declined, for the first time in three months, by 7.7% to $7.7 billion in November.
Meanwhile, the strong bearish pressure surrounding the US Dollar, led by a report that Chinese officials had recommended slowing or halting US Treasury purchases, now seems to have eased, at least for the time being and remained supportive of the pair's modest uptick for the third consecutive session.
The greenback found some additional support from hawkish comments by Chicago Fed President Charles Evans, anticipating US economic growth for 2018, 2019 at 2.5%.
The up-move, however, seemed lacking strong conviction and the pair remained capped below the key 1.2500 psychological mark amid the ongoing bullish run-up in crude oil prices, which tends to underpin demand for the commodity-linked currency - Loonie.
Adding to this, narrowing monetary policy divergence between the Fed and the BOC, with the later widely expected to raise interest rates next week, might further collaborate towards keeping a lid on any near-term meaningful up-move for the major.
Technical levels to watch
Bulls would be eyeing for a break through the 1.2500 handle, above which the pair is likely to head towards 1.2535-40 supply zone before eventually darting towards 100-day SMA hurdle near the 1.2590 region.
On the flip side, retracement back below mid-1.2400s now seems to find immediate support near the 1.2415-10 region, which if broken could accelerate the fall back towards 1.2355 level (last Friday’s swing low).