USD/CAD pulls away from daily highs, looks to close flat near 1.2600

USD/CAD remains on track to end the day unchanged.
Canadian economy expanded by 0.7% in June as expected.
US Dollar Index recovers its losses after dropping to two-week lows.

Eren Sengezer FXStreet

The USD/CAD pair climbed to a daily high of 1.2654 during the American trading hours but failed to preserve its bullish momentum. As of writing, the pair was posting small daily gains at 1.2607.

DXY pares daily losses

Earlier in the day, the data published by Statistics Canada revealed that the Canadian economy expanded by 0.7% on a monthly basis in June as expected. On a negative note, annualized GDP growth in the second quarter arrived at -1.1% and missed the market expectation of 2.5% by a wide margin.

In addition to the disappointing data from Canada, the 1% decline witnessed in crude oil prices made it difficult for the commodity-related loonie to find demand on Tuesday.

On the other hand, the US Dollar Index (DXY), which dropped to a two-week low of 92.40 during the European trading hours, is currently flat on the day at 92.65. The Conference Board's monthly report showed on Tuesday that the Consumer Confidence in the US worsened to 113.8 in August from 125.1 in July. Although the DXY's recovery is limiting USD/CAD downside, for the time being, Tuesday's price action seems to be a product of month-end flows.

On Wednesday, IHS Markit will release the August Manufacturing PMI for Canada. The US economic docket will feature the ISM Manufacturing PMI.

Technical levels to watch for

USD/CAD

Overview
Today last price	1.261
Today Daily Change	0.0004
Today Daily Change %	0.03
Today daily open	1.2606

Trends
Daily SMA20	1.2602
Daily SMA50	1.2527
Daily SMA100	1.238
Daily SMA200	1.2541

Levels
Previous Daily High	1.2634
Previous Daily Low	1.2574
Previous Weekly High	1.2834
Previous Weekly Low	1.2579
Previous Monthly High	1.2808
Previous Monthly Low	1.2303
Daily Fibonacci 38.2%	1.2597
Daily Fibonacci 61.8%	1.2611
Daily Pivot Point S1	1.2575
Daily Pivot Point S2	1.2544
Daily Pivot Point S3	1.2515
Daily Pivot Point R1	1.2636
Daily Pivot Point R2	1.2666
Daily Pivot Point R3	1.2697

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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