USD/CAD supported at 1.28 ahead of US GDP and PCE

• The crude oil pullback weighs on the Canadian Dollar.
• US GDP and PCE are due on Wednesday at 12:30 GMT. 

The USD/CAD is trading at around 1.2888 up 0.25% on Tuesday as crude oil is losing momentum and the greenback got a boost from easing tensions from the impending trade war between the US and China. 

Crude oil is witnessing some profit taking as the API crude oil inventories showed a build of 5.321 million while 1 million was expected by analysts. Facilitating the pullback in the oil market are the Middle-East tension over the weekend which has cooled off as the conflict didn’t lead to a supply disruption. The CAD is tightly linked to the price of oil. 

Wednesday will see the US Gross Domestic Product and the inflation data. The PCE, Personal Consumption Expenditures Prices, is the favorite indicator of the Fed. A deviation in the numbers would likely lead to volatility in the currency market. 

USD/CAD daily chart

The USD/CAD formed a double bottom with the March, 12 low as traders are likely awaiting US data on Wednesday. The pair is trading above its 50, 100 and 200-period simple moving average. 

USD/CAD 4-h chart

The USD/CAD formed a wedge bull flag as it is consolidating in the 1.2820-1.2900 range. Support is seen at the 1.28 handle; followed by the 1.26 figure previous swing low. Upside targets are seen at the 1.30 handle; followed by 1.3120 previous swing high.