USD/CAD upside halted around 1.2880, US GDP eyed

• Spot keeps the trade around 3-month tops below 1.2900.
• USD boosted by ECB and House vote.
• Flash US Q3 GDP on sight followed by U-Mich index.

The greenback remains on the positive footing at the end of the week, taking USD/CAD to the 1.2880 area in early trade although losing some upside momentum soon afterwards.

USD/CAD focus on US GDP

The pair is up for the seventh session in a row today, keeping the rally well and sound and gaining nearly 7% since 2017 lows in the mid-1.2000s seen in early September.

The US-CA yield spread differentials, particularly in the shorter end of the curve, remains the almost exclusive driver behind the pair’s up move, relegating crude oil dynamics to a secondary role.

The recent cautious stance from the Bank of Canada at its meeting on Wednesday removed some tailwinds from the prospects of further tightening in the near term, although domestic economic fundamentals remain strong and hint at the possibility that another rate hike could be in the pipeline as earlier as Q1 2018.

Data wise today in the US docket, preliminary Q3 GDP figures will be the salient event seconded by the final print of the Reuters/Michigan index for the month of October.

USD/CAD significant levels

As of writing the pair is up 0.20% at 1.2872 facing the initial hurdle at 1.2888 (high Oct.27) seconded by 1.2927 (50% Fibo of the 2017 drop) and finally 1.3010 (200-day sma). On the flip side, a breach of 1.2646 (10-day sma) would aim for 1.2570 (10-day sma) and then 1.2431 (low Oct.12).