USD/CAD: Supply capping minor-recovery, stays below 1.3000

Having bottomed out at five-month lows of 1.2973 in the Asian trades, the USD/CAD pair extends it tepid-recovery mode back towards 1.3000 levels, as we progress towards the European open.

USD/CAD could drop further on stronger Canadian GDP

The major remains pressured so far this session, as Loonie continues to benefit from a solid recovery staged by oil prices from multi-month troughs. Also, the recent series of upbeat Canadian fundamentals and hawkish remarks from the BOC policymakers keep the sentiment buoyed around the domestic currency.

Additionally, persistent weakness in the US dollar, despite higher Treasury yields, collaborates to the bearish momentum seen in the USD/CAD pair over the last five trading sessions.

Meanwhile, yesterday’s upbeat US GDP revision was largely ignored, and hence, attention now turns towards the Canadian GDP and US dataflow for the next direction.

USD/CAD Technical levels                

The next resistance can be seen at 1.3000 (round figure), 1.3029 (classic R1/ Fib R1) and 1.3043 (Jun 29 high). Next support to the downside can be found at 1.2950 (psychological levels), 1.2900 (key psychological support) and 1.2850 (multi-month lows).