“¢ Canadian GDP growth figures fall short of consensus estimates, flat m/m.
“¢ Mostly in-line/positive US economic data supportive of the modest USD rebound.
“¢ Bullish oil prices underpin Loonie and now seemed to cap any additional gains.
The USD/CAD pair built on its steady climb from the 1.2900 neighborhood and spiked to fresh session tops in the last hour.
The pair got a strong boost following the release of slightly weaker than expected Canadian GDP growth figures, coming in to show a flat m/m reading. Meanwhile, the economic growth during the second-quarter of 2018 stood at 2.9% annualized pace and missed consensus estimates pointing to a reading of 3.0%.
From the US, mostly in-line/slightly positive US economic data – core PCE price index, personal income/spending data and the usual initial weekly jobless claims, remained supportive of a mildly positive tone surrounding the US Dollar.
The pair climbed to an intraday high level of 1.2976 and recovered all of its losses posted in the past two-trading session. Further up-move, however, remained capped amid the prevailing bullish sentiment surrounding crude oil prices, which underpinned demand for the commodity-linked currency – Loonie.
Hence, it would be prudent to wait for a strong follow-through buying before confirming that the pair might have bottomed out in the near-term, especially against the backdrop of growing optimism over a possible NAFTA deal.
Technical levels to watch
Any subsequent up-move is likely to confront resistance near the key 1.30 psychological mark, above which the pair is likely to aim towards testing the 1.3040 supply zone. On the flip side, the 1.2935-30 area now seems to protect the immediate downside and is followed by a strong support near the 1.2900 handle.
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