USD/CAD trades flat below 1.31 despite broad-based USD weakness

• Mixed GDP report from the U.S. weighs on the greenback.
• WTI drops toward $69 to hurt the demand for the CAD.
• USD/CAD remains on track to record losses for the week.

The USD/CAD pair is trading in a 35-pip range and having a difficult time finding direction on Monday as the crude oil weakness doesn’t allow the pair to gather bearish momentum. At the moment, the pair is trading at 1.3065, losing only 7 pips on the day.

At the beginning of the NA session, the data from the U.S. showed that the economy is estimated to have grown by 4.1% in the second quarter of the year following the first quarter’s 2.2% growth. However, the PCE and the core-PCE prices rose 1.8% and 2%, respectively, to fall short of market expectations and weighed on the greenback. After dropping to a session low at 94.64 the US Dollar Index was able to stage a modest recovery on upbeat consumer sentiment data and was  last seen down 0.05% on the day at 94.72.

The University of Michigan announced that the Consumer Confidence Index improved to 97.9 in July’s final reading from 97.1 in the previous estimate. However, the report highlighted increasing concerns over Trump administration’s trade policy. “Across all households, 35% spontaneously mentioned that the tariffs would have a negative economic impact in July, up from 21% in June and 15% in May,” the UoM said.

On the other hand, the commodity-sensitive loonie failed to gain traction against its rivals amid falling crude oil prices. After closing the last three days in the positive territory, the barrel of West Texas Intermediate fell to $69 mark to erase a big portion of its weekly upside. As of writing, the barrel of WTI was at $69.20, down 0.5% on the day.

Technical outlook

The initial support for the pair aligns at 1.3025 (Jul. 26/Jul. 25 low) ahead of 1.2965 (100-DMA) and 1.2915 (Jun. 9 low). On the upside, resistances align at 1.3125 (50-DMA), 1.3190 (Jul. 24 high) and 1.3290 (Jul. 19 high).