USD/CAD hits fresh monthly highs above 1.2640

• Canadian dollar falls versus its main rivals on Thursday.
• USD/CAD extends rally, firm above 1.2600, now looking at 1.2655.
• Risk aversion boosts the greenback versus commodity and emerging market currencies.

The USD/CAD accelerated to the upside on the back of a stronger US dollar and climbed to 1.2645, reaching the highest level since October 6. The pair is rising for the third consecutive day.

Positive economic data and stocks in red

In Canada, the ADP report showed an increase in jobs of 65K in October, the best month since April. Also, employment insurance beneficiaries fell by 21.7% in September.

In the US, economic numbers came in better-than-expected. Jobless claims dropped to a fresh pandemic low, and the Philly Fed jumped from 23.8 to 39, surpassing the 24 of market consensus.

The figures boosted the greenback, particular against commodity and emerging market currencies. The decline in equity prices is also boosting the dollar. In Wall Street, the Dow Jones is falling by 0.70% and the Nasdaq by 0.32%

After the number, USD/CAD rose back above 1.2600 and during the American session continued with the move. A modest increase in crude oil prices is not helping the loonie that among G10 currencies is the worst performer.

Technical indicators favor the upside in USD/CAD, with key moving averages now turning north. A slide under 1.2580 would alleviate the bullish pressure. On the upside, the next resistance is seen at 1.2655, followed by 1.2695.

Technical levels