- USD/CAD touched a six-week low at 1.2794, but recovered some ground, waiting to break above 1.2850.
- The United States revealed that second-quarter GDP contracted less than the final reading for the first quarter.
- USD/CAD remains positive due to the strength of the US dollar and the drop in oil prices.
The USD/CAD bounces off weekly lows and rises towards the 50 day EMA at 1.2853 after dismal US economic data suggests the country is in a “technical” recession after the Fed hiked on Wednesday interest rates at 75 basis points and admit that output and spending are “softening”.
USD/CAD is trading at 1.2833 after updating six-week lows at 1.2794, but recovered and hit a daily high just above the 100-hour EMA at 1.2869 before reaching current levels.
USD/CAD advances despite disappointing US data
Sentiment remains mixed but fragile and could sour throughout the day, meaning bullish action is on the way for USD/CAD. US second quarter GDP data has US stocks fluctuating between gains and losses throughout the day. The US Commerce Department reported that GDP fell 0.9% annually, after declining 1.6% in the first quarter, meaning the US is in a technical recession.
Meanwhile, the US Department of Labor revealed that jobless claims for the week ending July 23 rose by 256,000, above forecasts but down from 261,000 the previous week.
Aside from this, the rising dollar and falling US crude prices keep USD/CAD risks to the upside. The US Dollar Index is up 0.04% at 106.504, while WTI is trading at $97.99 a barrel, down 0.02%.
what to see on friday
The Canadian economic calendar will include May GDP and a preliminary June GDP reading. In the US, June’s Core and Headline PCE Price Index will be released, along with Chicago PMI and University of Michigan Consumer Sentiment for July.
Technical levels
Source: Fx Street
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