USD/CAD approaches multi-month lows after US & Canada data

The USD/CAD, which has been spending the day under pressure on crude oil recovery, met a fresh selling wave following the macroeconomic data releases from the U.S. and Canada. After dropping to a session low of 1.2924, the pair was able to find support there and is now trading at 1.2935, down 0.16% on the day.

Today's data from the United States revealed that the private sector employment growth couldn't meet the market consensus as the ADP reported it at 158K (vs. 185K). Additionally, In the week ending July 1, the advance figure for seasonally adjusted initial jobless claims increased to 248K from 244K in the previous week. Furthermore, although the goods and services trade deficit eased to $46.5 billion in May, it was still higher that the market expectation of $46.2 billion.

• US: Private sector employment increased by 158,000 jobs in June - ADP

On the other hand, boosted by a 10.8% increase in residential building permits, Canadian municipalities issued a total of $7.7 billion building permits (+8.9%) in May, the third highest value on record. 

• Canada: Municipalities issued $7.7 billion worth of building permits in May

The dismal data from the United States hurt the greenback, pushing the US Dollar Index to a fresh session low at 95.70. At the moment, the index is at 95.75, down 0.23% on the day. In the meantime, in addition to the robust data from Canada, the demand for commodity-sensitive loonie high as the barrel of West Texas Intermediate is testing the $46 level while gaining nearly 2% on the day.

Coming up in the session, Markit and ISM will release their non-manufacturing PMI data for the U.S. and FOMC members Powell and Fischer will be giving speeches. 

Technical outlook

If oil prices continue to recover and the greenback fails to gain traction, the pair could aim for the1 10-month low that it set on Tuesday at 1.2910. Below that level, 1.2820 (Sept. 7 low) and 1.2760 (Aug. 18 low) could be seen as short-term technical supports. On the upside, resistances align at 1.2980 (daily high), 1.3020 (10-DMA) and 1.3135 (20-DMA).