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  • USD/CAD rises from the 1.2600 area as the US dollar seeks strength.
  • The recovery in oil prices halts that weigh on the Canadian dollar.
  • The Canadian GDP is struggling as compared to the American GDP.

The USD/CAD price traded sideways during the first half of the day in a relatively tight range around 1.2600 but gained momentum during the last hour.

Currently, the pair is up 0.34% on the day to 1.2633.

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The USD/CAD pair is rising during the American session as a result of the strengthening dollar. Adding to the dollar’s strength, a 1% increase in US 10-year government bonds yields helped boost the dollar index (DXY) to rise above 93.

US durable goods orders for July will be analyzed later in the session. A stronger-than-expected level would help the US dollar stay ahead of its peers. Investors are expecting a 0.3% m/m decline.

However, the momentum in the recovery of crude oil appears to have diminished on Wednesday. In the first two days of the week, the West Texas Intermediate (WTI) oil price rose nearly 9% to $67.70, making it difficult for the Canadian dollar to stay strong against the US dollar. The US Energy Information Administration (EIA) publishes weekly data on crude oil reserves at 1430 GMT.

Canada’s real GDP per capita increased only 3.3% between the fourth quarter of 2015 when the Liberals entered power and the fourth quarter of 2019 when the Coronavirus pandemic began. Meanwhile, the US grew 7.5% during this same period.

Since the beginning of the pandemic, the numbers have been just as bad. For example, in real GDP per capita, the United States and Canada saw 1.3 percent and 2.4 percent declines, respectively (newest data from Canada). In other words, according to Trudeau’s progressive plan, Canada’s economic growth was worse before the pandemic has continued to be worse since the beginning of the pandemic and will be further affected by new government barriers in the future.

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The Canadian economic report will not contain any high-impact data until the end of the day.

USD/CAD price technical analysis: 200-SMA to lend support

USD/CAD 4-hour price chart analysis
USD/CAD 4-hour price chart analysis

The USD/CAD price has moved 62% of the average daily range so far. The price remains supported above the 200-period SMA. However, the pair is still lying below the 50-period SMA. The next hurdle for the pair lies at 20-period SMA around 1.2680. The volume is slightly rising, lending room to the bulls to gain towards the mid-1.2600 level.

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