USD/CAD challenging tops near 1.2940 on steady BoC

• The pair manages well to keep business above the 1.29 handle.
• The BoC left rates unchanged at 1.25%, in line with consensus.
• Focus now shifts to US non-farm payrolls and protectionism.

The Canadian Dollar keeps the negative bias vs. the buck on Wednesday, taking USD/CAD to the 1.2935/40 band in the wake of the BoC’s meeting.

USD/CAD steady, reverts Tuesday’s drop

Spot manages well to keep the trade above 1.2900 the figure today after the Bank of Canada left unchanged its key rate at 1.25%, matching initial forecasts.

The central bank expressed its concerns over trade, which is now considered a source of uncertainty, while noted that wage growth has firmed, albeit remains lower than in an economy with no labour slack.

In the meantime, CAD stays under heavy pressure against the backdrop of heightened uncertainty around the NAFTA and the likeliness that US tariffs on imports of steel and aluminium could be signed by Trump tomorrow.

The pair keeps the rally well and sound so far today, up for the third session in a row and gaining around 6% since 2018 lows (January 31 at 1.2248) to yesterday’s test of the psychological handle at 1.30 the figure.

USD/CAD significant levels

As of writing the index is gaining 0.49% at 1.2940 facing the initial hurdle at 1.3001 (2018 high Mar.5) followed by 1.3132 (61.8% Fibo of the 2017 drop) and finally 1.3349 (high Jun.21 2017). On the other hand, a breakdown of 1.2810 (10-day sma) would open the door to 1.2755 (38.2% Fibo of the 2017 drop) and then 1.2677 (200-day sma).