USD/CAD advances beyond 1.30 as DXY jumps above 94

  • ECB meeting weighs on European currencies, boosts the demand for the USD.
  • DXY rises to fresh 2-week high above 94.
  • USD/CAD erases daily losses, turns positive above 1.30.

The USD/CAD pair added more than 50 pips in the last hour and rose above the critical 1.30 mark after the ECB announcements and the following press conference forced investors to lean toward the USD. As of writing, the pair is trading at 1.3002, up 0.12% on the day.

The ECB announced that it would start tapering the amount QE purchases after September but failed to deliver a hawkish message as Draghi said interest rates would remain at their current level until at least the end of the summer of 2019. Boosted by the shift in the market interest, the US Dollar Index jumped to its best level since June 1 at 94.31 and was last seen at 94.28, where it was up 0.77% on the day.

Meanwhile, the data from the United States showed that the retail sales increased by 0.8% in May to beat the market expectation of 0.4% and the import and export prices indexes on a yearly basis rose by 4.3% and 4.9% in May, both figures surpassing the experts' estimates.

There won't be any other macroeconomic data releases in the remainder of the day. However, the positive mood surrounding crude oil prices could make it difficult for the pair to extend its gains as it would help the commodity-linked loonie to show resilience against the greenback.

Technical levels to consider

With a daily close above 1.3000 (psychological level), the pair could target 1.3050 (Jun. 13 high) and 1.3100 (psychological level). On the downside, supports are located at 1.2955 (20-DMA/daily low), 1.2865 (50-DMA) and 1.2815 (May 31 low).

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