USD/CAD stays calm in daily range near 1.3070 following US & Canada data
- Core-PPI in the U.S. declines in August.
- Canadian capacity utilization rises by less than expected.
- WTI rises above the $70 mark.
The USD/CAD pair didn't show a reaction to the U.S. and Canada data on Wednesday and continues to trade in its daily range. As of writing, the pair was virtually unchanged on the day at 1.3070.
Statistics Canada today announced that the industries operated at 85.5% capacity in the second quarter compared to 83.7% in the first quarter and fell short of the market expectation of 86.9%. On the other hand, the core producer price index in the U.S. contracted by 0.1% on a monthly basis in August to bring the annual rate down to 2.3% from 2.7%. The US Dollar Index, which was moving sideways in the positive territory for the majority of the day, retreated modestly and was last seen flat at 95.10.
On the other hand, crude oil, which was the main driver of the pair's price action on Tuesday, fails to provide directional clues as the West Texas Intermediate seems to have lost its momentum. Nonetheless, the barrel of the WTI is up 0.5% on the day at $70.20 and could weigh on the pair is it continues its march higher if the weekly EIA report shows a larger-than-expected draw in U.S. crude oil inventories.
Later in the session, FOMC members Bullard and Brainard will be delivering speeches and the Fed is scheduled to publish its Beige Book.
Technical levels to consider
The immediate resistance for the pair aligns at 1.3080 (100-DMA/daily high) before 1.3170 (Sep. 11 high) and 1.3200/05 (psychological level/Sep. 4 high). On the downside, supports are located at 1.3000 (psychological level), 1.2960 (Aug. 7 low) and 1.2900 (Aug. 29 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.
