- USD/CAD failed to preserve its modest intraday gains to the 1.2470-75 region.
- Sustained USD selling bias was seen as a key factor that acted as a headwind.
- Mixed US macro data, Canadian GDP failed to provide any meaningful impetus.
The USD/CAD pair held steady near the 1.2430-35 region, or over two-week lows and had a rather muted reaction to the US/Canadian macro data.
The pair struggled to capitalize on its intraday positive move, instead met with some fresh supply near the 1.2470-75 area amid the prevalent US dollar selling bias. Bulls seemed rather unimpressed by a softer tone around crude oil prices, which tend to undermine the commodity-linked loonie.
The USD remained on the defensive near one-month lows amid firming expectations that the Fed would retain its ultra-lose monetary policy stance for a longer period. It is worth recalling that the Fed Chair Jerome Powell emphasised that they were some ways away from substantial progress on jobs.
On the economic data front, the US Core PCE Price Index – the Fed's preferred inflation gauge – edged higher to 3.5% YoY in June, missing expectations for a reading of 3.7%. This, to a larger extent, offset an unexpected rise in the Personal Income and better-than-expected Spending data.
Meanwhile, the Canadian monthly GDP report showed that the economic activity contracted 0.3% MoM in May. This, along with a modest pullback in crude oil prices, held traders from placing any aggressive bullish bets around the Canadian dollar and helped limit deeper losses for the USD/CAD pair.
Friday's US economic docket also features the release of Chicago PMI and revised Michigan Consumer Sentiment Index, though is unlikely to provide any meaningful impetus to the USD/CAD pair. That said, the USD/oil price dynamics might still contribute to producing some trading opportunities.
Technical levels to watch
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD edges lower toward 1.0700 post-US PCE
EUR/USD stays under modest bearish pressure but manages to hold above 1.0700 in the American session on Friday. The US Dollar (USD) gathers strength against its rivals after the stronger-than-forecast PCE inflation data, not allowing the pair to gain traction.
GBP/USD retreats to 1.2500 on renewed USD strength
GBP/USD lost its traction and turned negative on the day near 1.2500. Following the stronger-than-expected PCE inflation readings from the US, the USD stays resilient and makes it difficult for the pair to gather recovery momentum.
Gold struggles to hold above $2,350 following US inflation
Gold turned south and declined toward $2,340, erasing a large portion of its daily gains, as the USD benefited from PCE inflation data. The benchmark 10-year US yield, however, stays in negative territory and helps XAU/USD limit its losses.
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
Week ahead – Hawkish risk as Fed and NFP on tap, Eurozone data eyed too
Fed meets on Wednesday as US inflation stays elevated. Will Friday’s jobs report bring relief or more angst for the markets? Eurozone flash GDP and CPI numbers in focus for the Euro.