USD/CAD spikes beyond 1.27 handle and retreats, focus remains on BoC

   •  Jumps to the highest level since mid-August
   •  BoC decision in focus

The USD/CAD pair finally broke through its Asian/early European session consolidation phase and surged through the 1.2700 handle to its highest level since mid-August.

The pair advanced for the fifth consecutive session and built on overnight bullish break 100-day SMA barrier. The up-move was being supported by a sharp follow-through upsurge in the US Treasury bond yields, despite a modest US Dollar pullback. 

Meanwhile, a mildly softer tone around crude oil prices was also seen weighing on the commodity-linked currency - Loonie and provided an additional boost to the pair's ongoing upward trajectory. 

Today's up-move could also be attributed to some repositioning trade ahead of the BoC monetary policy decision. The Canadian central bank is universally expected to maintain status quo and hence, the key focus would be on the accompanying statement, which would be looked upon for clues over any possible hike in December. 

   •  Bank of Canada to stay on hold – TDS

The pair quickly retreated over 25-pips from session tops, touched in the past hour, as traders now look forward to the US economic docket, featuring the release of US durable goods orders and new home sales data, for some short-term opportunities.

Technical levels to watch

A strong follow-through momentum beyond the 1.2700 handle has the potential to continue lifting the pair towards its next major hurdle near the 1.2755 region ahead of August monthly high resistance near 1.2780 level. 

On the flip side, any meaningful pullback now seems to find support near the 1.2655 region (100-day SMA), below which the pair could correct back below the 1.2600 handle towards its next support near the 1.2570-65 region.