USD/CAD well bid for third straight session, 1.26 on sight ahead of ADP report

The USD/CAD pair extended its recovery move from 25-month lows touched recently and jumped to near two-week tops, around the 1.2575-80 region.

A modest US Dollar recovery on Tuesday, coupled with sharp retracement in crude oil prices helped the pair to build on to its momentum beyond the key 1.2500 psychological mark. A follow through decline in oil prices continued lifting the pair through early European trading session on Wednesday. 

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The pair has now moved beyond 1.2565-70 immediate hurdle and even shrugged off a subdued greenback action, with weaker commodity prices, which tends to weigh on the commodity-linked currency - Loonie, acting as an exclusive driver of the pair's up-move for the third consecutive session.

Later during the NA session, traders would take cues from the US private sector employment details - ADP report, which is seen as a precursor to Friday's official headline NFP print and hence, might provide some fresh impetus to the major.

Technical levels to watch

Immediate resistance is pegged near the 1.2600 handle, above which the recovery move could further get extended towards 1.2640 intermediate horizontal resistance en-route the 1.2700 round figure mark.

On the flip side, mid-1.2500s now becomes an immediate support to defend, which if broken could drag the pair back towards the 1.25 handle ahead of 1.2475-70 horizontal support.