USD/CAD recovers above 1.33 despite disappointing US GDP report

GDP growth in the U.S. misses expectations with 2% in Q1.
Crude oil prices make a technical correction on Thursday.
Kansas Fed Manufacturing Index will be released next.

Eren Sengezer FXStreet

Despite the dismal GDP report from the United States, the USD/CAD started recovering its losses and rose above the 1.33 mark. As of writing, the pair was trading at 1.3305, still down 0.25% on the day.

The data released by the Bureau of Economic Analysis revealed that the real-GDP growth in the first quarter eased to 2% in the third estimate from 2.2% in the second estimate. Further details of the report showed that core personal consumption expenditures remained steady at 2.3% in line with expectations. Following the initial negative reaction, the US Dollar Index gained traction and rose above the 95 mark and was last seen at 95.05, where it was virtually unchanged on the day.

On the other hand, crude oil's rally is taking a break on Thursday, which makes it for the commodity-sensitive loonie to show resilience against the buck.

The barrel of West Texas Intermediate added over $8 since last Friday on the back of OPEC's decision and the report of the U.S. pushing its allies to stop importing oil from Iran. However, today's price action suggests that the barrel of WTI is making a technical correction as it's down 0.25% on the day near mid-72s.

Later in the session, Kansas Fed Manufacturing Index will be released from the United States. Furthermore, FOMC members Bullard and Bostic will be delivering speeches.

Technical levels to consider

Technical resistances for the pair could be seen at 1.3330 (Jun. 27/26/25 high), 1.3380 (Jun. 22 high) and 1.3440 (Apr. 5, 2017, high). On the downside, supports are located 1.3260 (Jun. 22 low), 1.3200 (psychological level/Jun. 19 low) and 1.3160 (Jun. 18 low).

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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