USD/CAD hits fresh 2-week tops post-US macro data

   “¢   The USD remained well-bid after data showed the US Q2 GDP growth stood at 4.2%.
   “¢   Upbeat durable goods orders partly offset by weaker core durable goods figures.
   “¢   Focus shifts to speeches by Fed Chair Jerome Powell and BoC Governor Stephen Poloz.

The USD/CAD pair continued gaining positive traction through the early North-American session and spiked to fresh two-week tops post-US economic data.

The pair built on its recovery move from 3-1/2 month lows set last week and traded with a positive bias for the fourth session in the previous five. A goodish pickup in the US Dollar demand, supported by a widely expected Fed rate hike on Wednesday, was seen as one of the key factors driving the pair higher.

The already stronger greenback got an additional boost following today’s mostly in-line/better-than-expected US macroeconomic releases, which reinforced prospects for another rate hike again in December. In fact, the final US GDP print showed that economic growth for the second quarter of 2018 stood at 4.2% annualized pace, matching the previous estimates.  

Adding to this, durable goods orders witnessed a significant rise of 4.5% m/m in August, though was partly offset by weaker than expected core durable goods orders (excluding transportation items), which recorded a modest monthly growth of 0.1% as against 0.5% anticipated.  

Meanwhile, a strong bullish sentiment surrounding crude oil prices, which tend to underpin demand for the commodity-linked currency – Loonie, did little to hinder the momentum. With the USD price dynamics turning out to be an exclusive driver of the pair’s up-move on Thursday, market participants now look forward to scheduled speeches by the Fed Chair Jerome Powell and the BoC Governor Stephen Poloz for some fresh impetus.

Technical levels to watch

A follow-through buying has the potential to lift the pair further beyond the 1.3100 handles towards its next major hurdle near the 1.3140-50 supply zone. On the flip side, the 1.3050-45 zone now seems to protect the immediate downside, which if broken might accelerate the slide further towards the key 1.30 psychological mark.