USD/CAD inches higher towards 1.25 as oil rally falters
|The USD/CAD pair gained some traction during the European session and started to recover yesterday's losses towards the 1.25 handle. As of writing, the pair is trading at 1.2491, up 0.37% on the day.
Today's macro data from the United States came in mixed but the greenback, measured by the US Dollar Index, continues to preserve its daily gains. Following yesterday's sharp drop in the NA session, the index came under a renewed pressure during the Asian session and touched its lowest level in 13 months at 93. After finding support there, the index turned positive and is now at 93.56, up 0.3% on the day.
According to the weekly report released by the US Department of Labor, weekly initial claims increased to 244K in the week ending July 22 from 234K. Other data from the U.S. showed that the international trade deficit contracted to $63.9 billion in June from $66.3 billion in May and beat the market expectations of $65 billion.
On the other hand, crude oil's rally, which has been helping the commodity-sensitive loonie gather strength against its rivals since the beginning of the week, seems to have cooled down a bit on Thursday. After moving above the $49 mark for the first time in nearly two months in the last hour, the barrel of West Texas Intermediate lost its momentum and is now trading at $48.70, virtually unchanged on the day.
There are no more data left in the day. On Friday, economic docket will feature GDP growth numbers from both Canada and the United States.
Technical outlook
With today's recovery, the RSI on the daily graph started to correct its oversold readings but is still below the 30 mark, suggesting that the recovery could continue. A daily close above the 1.2500 (psychological level) mark could open the door to 1.2555 (10-DMA) and 1.2690 (Jul. 18 high). On the downside, supports align at 1.2415 (daily low), 1.2365 (Jun. 2, 2015, low) and 1.2300 (psychological level).
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.