- Canadian economic growth remained flat in July as against 0.1% growth expected.
- Surging US bond yields lifted the USD to two-year tops and remained supportive.
- Investors now look forward to the US ISM manufacturing PMI for a fresh impetus.
The USD/CAD pair held on to its strong intraday gains through the early North-American session and spiked to over one-week tops, closer to the 1.3300 handle post-Canadian GDP.
The pair caught some fresh bids on Tuesday and recovered farther from near two-week lows set last Friday amid the prevalent bullish sentiment surrounding the US Dollar. Against the backdrop of growing optimism over a possible resolution of the prolonged US-China trade dispute, a strong follow-through upsurge in the US Treasury bond yields lifted the Greenback to two year tops and remained supportive.
Weaker Canadian GDP provides an additional boost
Meanwhile, the latest leg of a sudden move up followed the disappointing release of Canadian monthly GDP report, which showed that the economic growth remained flat in July as compared to modest growth of 0.1% expected and 0.2% previous. However, a modest pickup in Crude Oil prices, which tend to underpin demand for the commodity-linked currency – Loonie, seemed to be the only factor capping any further gains.
Hence, it will be prudent to wait for a sustained move beyond the very important 200-day SMA barrier near the 1.3300 round-figure mark before traders start positioning for any further near-term appreciating move. Moving ahead, Tuesday’s US economic docket features the release of ISM manufacturing PMI, which will be looked upon for some fresh impetus and grab some short-term trading opportunities.
Technical levels to watch
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