The Canadian Dollar (CAD) made slight gains against the US Dollar (USD) as the Greenback eased off recent gains and oil prices took a breather. With oil being Canada’s main export, the CAD’s momentum was limited. The USD/CAD remained relatively flat for the day, down 0.2% at its lowest point near the consolidation level of 1.3500. The CAD’s performance continues to be influenced by oil prices and the broader US Dollar Index (DXY).
Canada’s economic calendar remains thin, with Friday’s Gross Domestic Product (GDP) figures being the highlight of the week. Forecasts predict a meager growth of 0.1% in Canadian GDP for July, compared to the previous month’s decline of -0.2%. Oil prices and the performance of the US Dollar Index will continue to be the main drivers for the Canadian Dollar.
In terms of technical analysis, the CAD has gained against the USD since September but is struggling to hold onto the 1.35 level. The USD/CAD is currently trading near 1.3500, with support from the 200-day Simple Moving Average at 1.3450. A significant resistance barrier at 1.3650 has repeatedly rejected price action throughout the year. The future direction of the CAD will depend on factors such as oil prices and USD strength.
During the Asian session, Japan will release important economic reports, while Germany and the UK will also report key data. In the US, the focus will be on the Core Personal Consumption Expenditures, and Canada will release its monthly GDP figures.