USD/CAD rebounds back above 1.2400 from six-day lows

• US dollar mixed despite US data, DXY holds at daily highs
• Canadian dollar among top performers of the day.

The USD/CAD is falling modestly on Wednesday, with the Loonie among the few currencies to rise against the greenback. The pair bottomed at 1.2386 after the beginning of the American session, and during the last hour, it rebounded back above 1.2400.

The rebound of the pair took place as the US dollar recovered strength across the board. It is trading near 1.2420, still negative for the day but off lows. The greenback is resuming the upside supported by higher US yields.

Economic data from the US surprised with the CPI inflation rate reached the highest level since 1990. A different report showed initial jobless claims dropped to fresh pandemic lows.

Short-term outlook

The bias in USD/CAD still points to the downside. A recovery above 1.2450 would remove the bias, favoring a test of the weekly high at 1.2485. A consolidation below 1.2400 should strengthen the negative tone. The next support stands at 1.2365.

On the contrary, the daily chart shows USD/CAD rebounding from the 20-day moving average and holding a bullish perspective. The 200-day simple moving average at 1.2475 continues to curb the upside.

Technical levels