USD/CAD retraces daily rally, inches closer to 1.32 handle

US Dollar Index reverses direction in the American session.
Disappointing ISM Manufacturing PMI triggers a USD selloff.
WTI drops below $57, loses 2% on the day.

Eren Sengezer FXStreet

The USD/CAD pair climbed to its highest level in more than five weeks at 1.3247 earlier today but started to erase its gains in the last few hours as the Greenback came under renewed selling pressure. As of writing, the pair was still up 0.15% on the day at 1.3210.

ISM PMI drags DXY lower on Thursday

The US Dollar Index (DXY), which advanced to a 26-month high of 98.93 today, reversed its course during the American trading hours after the data published by the Institute for Supply Management showed that the manufacturing sector in the US continued to lose momentum with the headline Purchasing Managers Index (PMI) coming in at 51.2 in July and missing the market expectation of 52. This data also seems to have a triggered a profit-taking action ahead of tomorrow's Nonfarm Payrolls data from the US. At the moment, the DXY is flat on the day at 98.60.

On the other hand, the Markit Manufacturing PMI in Canada rose back into the expansion territory above the 50 threshold and surpassed the market expectation of 49.5, helping the Loonie gather strength and cause the pair to push lower.

However, the fact that the barrel of West Texas Intermediate is losing 2% on the day at $56.70 makes it difficult for the commodity-related CAD to find demand and limiting the pair's downside for the time being.

Technical levels to watch for

USD/CAD

Overview
Today last price	1.3212
Today Daily Change	0.0021
Today Daily Change %	0.16
Today daily open	1.3191

Trends
Daily SMA20	1.3103
Daily SMA50	1.3228
Daily SMA100	1.3313
Daily SMA200	1.3305

Levels
Previous Daily High	1.3215
Previous Daily Low	1.3106
Previous Weekly High	1.32
Previous Weekly Low	1.3041
Previous Monthly High	1.3215
Previous Monthly Low	1.3016
Daily Fibonacci 38.2%	1.3173
Daily Fibonacci 61.8%	1.3147
Daily Pivot Point S1	1.3126
Daily Pivot Point S2	1.3061
Daily Pivot Point S3	1.3017
Daily Pivot Point R1	1.3236
Daily Pivot Point R2	1.328
Daily Pivot Point R3	1.3345

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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