- Manufacturing PMI rises to record high in Canada.
- Factory orders in May rebound in the United States.
- The barrel of WTI records sharp losses after refreshing multi-year highs above $75.
The USD/CAD pair dropped to a daily low of 1.3130 before making a modest recovery in the NA session. As of writing, the pair was trading at 1.3160, losing 0.2% on the day.
Earlier today, a broad-based greenback weakness and rising crude oil prices weighed on the pair. Following a technical correction on Monday, the barrel of West Texas Intermediate gained traction on heightened expectations of continuous supply disruptions and reached its highest level since November of 2014 above $75. However, a sudden sell-off witnessed in the last hour dragged the barrel of WTI back below the $73 mark and hurt the demand for the commodity-sensitive loonie.
However, today’s data from Canada showed that the activity in the manufacturing sector expanded at its fastest pace since Markit started publishing the PMI data back in 2011 and helped the CAD remain resilient against its American counterpart.
On the other hand, the Business Conditions Index released by the ISM-NY eased to 55 in June from 56.4 in May while the factory orders increased by 0.4% in May after contracting 0.4% in April. The mixed macroeconomic data from the United States failed to lift the greenback and the US Dollar Index continues to move sideways near its daily lows. At the moment, the index is down 0.25% on the day at 94.35.
Later in the session, the API is going to publish its weekly crude oil stocks report and a reaction by the WTI could impact the pair’s price action.
Technical levels to consider
The pair could encounter the first technical resistance at 1.3200 (psychological level/20-DMA) ahead of 1.3265 (Jun. 29 high) and 1.3380 (Jun. 27 high). On the downside, supports align at 1.3125 (Jun. 29 low), 1.3015 (50-DMA) and 1.2920 (Jun. 8 low).
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