USD/CAD off lows, regains 1.3050 ahead of Yellen

The greenback remains on the defensive vs. its peers on Tuesday, with USD/CAD bottoming out near 1.3020 ahead of Yellen’s testimony.

USD/CAD focus on Yellen

Spot managed to bounce off daily lows near 1.3020 following hawkish comments by Richmond Fed J.Lacker, who advocated for a rate hike sooner than later. Lacker also argued that extra fiscal stimulus should prompt higher interest rates.

However, the current rebound in crude oil prices are lending extra buying interest to CAD, limiting (or slowing down) the pair’s recovery. The barrel of West Texas Intermediate is gaining more than 1% in the vicinity of $53.70 following auspicious news from the OPEC deal.

On the data front, NFIB’s Business Optimism index surpassed estimates in January (105.9 act.) while Producer Prices have also surprised to the upside during the same period.

At her testimony today, Chair Yellen is expected to deliver a USD-supportive message, noting the solid US fundamentals and strengthening the case for higher interest rates.

USD/CAD significant levels

As of writing the pair is losing 0.20% at 1.3046 facing the next support at 1.3025 (low Feb.14) seconded by 1.3016 (low Jan.17) and then 1.2967 (low Jan.31). On the other hand, a surpass of 1.3131 (20-day sma) would aim for 1.3142 (200-day sma) and finally 1.3215 (high Feb.7).