USD/CAD extends gains above 1.26 after US & Canada data

Eren Sengezer FXStreet

The USD/CAD pair gained traction in the early NA session and added to its daily gains above the 1.26 handle. As of writing, the pair was trading at 1.2635, up 0.15% on the day.

According to the weekly data released by the US Department of Labor, initial claims for the unemployment insurance decreased by 12,000 to 232,000 in the week ending August 12, beating the market expectation of 240,000. Other data from the U.S. showed that the industrial production eased to 0.2% in July from 0.4% in June while the capacity utilization stayed unchanged at 76.7%. After the data, the US Dollar Index is preserving its daily gains as it adds 0.35% at 93.75.

On the other hand, following an expansion of 1.1% in June, manufacturing sales in Canada contracted by 1.8% in July amid decreasing sales in the petroleum and coal products.

Canada: Manufacturing sales fell 1.8% to $53.9 billion in June

In the meantime, crude oil prices remain under pressure on Thursday, with the barrel of West Texas Intermediate trading at its lowest level since July 25 at $46.50, losing 0.6% on the day, making it difficult for the commodity-sensitive loonie to retrace its losses against its peers.

Later in the session, a couple of FOMC members, Dallas Fed President Robert Kaplan and Minneapolis Fed President Neel Kashkari, will be giving speeches.

Technical outlook

The pair could face the initial hurdle at 1.2650 (daily high) ahead of 1.2700 (psychological level) and 1.2770 (50-DMA). On the downside, supports are located at 1.2585 (daily low), 1.2500 (psychological level) and 1.2415 (Jul. 27 low). The RSI indicator on the daily graph is moving sideways near the 50 mark, suggesting that the pair struggling to find a near-term direction.

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

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