USD/CAD turns flat below 1.3400 as focus shifts US and Canada GDP data

• USD/CAD lost its traction after climbing above 1.3400.
• US Dollar Index is posting modest daily gains above 94.00.
• US and Canada will release GDP data later in the day.

The USD/CAD pair rose above 1.3400 for the fifth straight trading day on Wednesday but lost its momentum and returned to the middle of its five-day range. As of writing, the pair was virtually unchanged on the day at 1.3385 as investors are waiting for key macroeconomic data releases from Canada and the US.

DXY stays above 94.00 ahead of key data

The US Bureau of Economic Analysis will release the final reading of the second-quarter Gross Domestic Product (GDP) growth. Markets expect the economy to contract by 31.7% on a yearly basis, as shown in the previous estimate. At the moment, the US Dollar Index (DXY) is up 0.24% on the day at 94.10. ADP Employment Change and Pending Home Sales will be featured in the US economic docket as well.

Previewing the ADP's private-sector employment report, “the September estimates of 648,000 for ADP and 850,000 for NFP may represent a return of the historical relationship between these two US employment numbers," noted FXStreet analyst Joseph Trevisani. "But even if these number end in agreement for September it will require more than one month or several until the markets trust ADP on Wednesday to front for NFP on Friday.”

On the other hand, Statistics Canada's monthly GDP report is expected to reveal a 3% expansion in the economic activity in July following June's reading of 6.5%. 

Meanwhile, crude oil is struggling to stage a rebound following Tuesday's slump and makes it difficult for the commodity-related loonie to gather further strength against its rivals. At the moment, the barrel of West Texas Intermediate (WTI) is down 0.5% on the day at $38.90.

Technical levels to watch for