USD/CAD clings to gains above 1.31 after EIA’s weekly stock report

• Crude oil struggles to recover after EIA shows a less-than-expected buildup in inventories.
• Canadian economy expands by 0.1% on a monthly basis in August.
• US Dollar Index jumps to fresh 2018 highs on upbeat ADP report.

The USD/CAD pair failed to take advantage of today’s Canadian GDP report and extended its upside move above the 1.31 mark during the NA session. With crude oil prices struggling to recover following the latest EIA report, the commodity-sensitive loonie is having a difficult time staying resilient against the buck. As of writing, the pair was trading at 1.3132, adding 0.17% on a daily basis.

Earlier today, Statistics Canada reported that the real GDP in Canada grew by 0.1% on a monthly basis in August to surpass the market expectation of 0%. Although the initial market reaction dragged the pair down to a session low of 1.31, it didn’t take long for the pair to reverse its direction.

Ahead of Friday’s critical NFP report, the ADP today announced that the private sector employment increased by 227K to beat the analysts’ estimate of 189K. On the back of the upbeat data, the US Dollar Index surged to its highest level in 16 months at 97.20 and was last at 97.10, where it was up 0.1% on a daily basis.

On the other hand, the EIA said that crude oil inventories in the U.S. rose by 3.2 million barrels in the week ended October 26. Although this data was less than the Reuters’ forecast of 3.7 million, crude oil prices couldn’t retrace their losses as the details of the report showed that the oil production rose to a record high of 11.2 million barrels. As of writing, the barrel of West Texas Intermediate was trading at 66.20, losing 0.15% on the day.

Technical levels to consider

The first technical resistance for the pair could be seen at 1.3160 (Oct. 26 high) ahead of 1.3200 (psychological level) and 1.3225 (Sep. 6 high). On the downside, supports are located at 1.3060 (20-DMA), 1.2990 (200-DMA) and 1.1915 (Oct. 16 low).