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  • US Dollar Index clings to daily gains above 94.50.
  • WTI trades near the $72 handle.
  • Coming up: Speeches by FOMC Chairman Powell and BoC Governor Poloz.

After surging to a 2-week high at 1.3080, the USD/CAD pair started to retrace its daily upside and was last seen trading at 1.3054, where it was up 0.26% on the day.

The pair’s rally on Thursday seems to be the product of higher demand for the dollar. After gathering strength against its rivals on the back of the FOMC’s hawkish monetary policy outlook, the dollar preserved its momentum with the help of today’s upbeat macroeconomic data releases from the United States and the US Dollar Index advanced to its highest level in ten days at 94.77. Although the index erased some of its recent gains, it was still up 0.44% on the day at 94.70 as of writing.

In line with the FOMC’s view of the U.S. economy continuing to grow at a robust pace, today’s data showed that the real-GDP expanded by 4.2% in the second quarter, according to the third estimate of the U.S. Bureau  of Economic Analysis. Additionally, durable doos orders increased by 4.2% on a monthly basis in August to better the analysts’ estimate of 2%.

Commenting on today’s data, “between Chairman Powell’s comment  yesterday the that the U.S. economy is in a particularly good spot and today’s robust durable good orders and excellent  business spending, despite the August pause the six months to July saw the strongest investment spending in five years, the dollar has room to run on the American economy alone,” FXStreet Senior Analyst Joseph Trevisani said.

Meanwhile, the barrel of West Texas Intermediate is sticking to modest daily gains near the $72 mark on Thursday to allow the commodity-sensitive loonie  to limit its losses vs the buck. Later in the session, Bank of Canada Governor Poloz and FOMC Chairman Powell will be delivering speeches.

Technical levels to consider

The immediate support for the pair aligns at 1.3040 (20-DMA/50-DMA) ahead of 1.3000 psychological level) and 1.2945 (200-DMA). On the upside, resistances could be seen at 1.3080 (daily high/100-DMA), 1.3170 (Aug. 16 high) and 1.3225 (Sep. 6 high).