USD/CAD dips to 1.3120 after US and Canadian GDP data

Disappointing US and Canadian GDP readings failed to provide any big momentum, with the USD/CAD pair dipping below 1.3150 level to currently trade around 1.3120-25 region.

The pair witnessed little price action after advanced US GDP reading estimated economic growth of 1.2% annualized rate during the second quarter of 2016 as against 2.6% growth forecasted. 

Meanwhile, the Canadian economy contracted by 0.6% during the month of May, which was more-than consensus estimating a contraction of 0.5%. 

Adding to this, lower-than-expected rise in raw-material prices during the month of June, as reflected by RMPI that is seen as a precursor to consumer inflation, might now fuel speculation of further easing by BOC and hence, might restrict any sharp downslide for the major. 

Traders now look forward to the release of Chicago PMI and revised UoM Consumer Sentiment index for some short-term momentum play.

Technical levels to watch

On the immediate downside, Thursday's swing low near 1.3100 handle closely followed by 200-day SMA near 1.3080 region seems to act as immediate support levels. Failure to hold these immediate supports seems to attract fresh selling pressure that could drag the pair back towards 1.3000 psychological mark support. 

On the flip side, recovery momentum above 1.3150 level, leading to a break above session high resistance near 1.3190-95 area would now confirm continuation of the pair's near-term upward trajectory.