USD/CAD stays calm around 1.2630 as investors await US data
- USD/CAD is moving sideways after closing in the red on Wednesday.
- US Dollar Index pushes higher toward 92.80 on Thursday.
- Retail Sales in US is expected to decline by 0.8% in August.
The USD/CAD pair lost more than 50 pips on Wednesday as crude oil's impressive rally provided a boost to the commodity-related loonie. On Thursday, the pair seems to have gone into a consolidation phase and was last seen trading flat at 1.2630.
DXY gains traction on Thursday
The barrel of West Texas Intermediate (WTI) gained 2.6% and closed in the positive territory for the fourth straight trading day on Wednesday, helping the CAD outperform its rivals. In addition to the improving market sentiment, the bigger-than-expected draw registered in the US crude oil stocks fueled WTI's upside. Currently, WTI is moving sideways around the mid-$72s.
On the other hand, the cautious market mood, as reflected by falling US stock index futures, is allowing the greenback to attract investors. At the time of press, the US Dollar Index (DXY) was up 0.28% at 92.73.
Later in the session, August Retail Sales data from the US will be watched closely by market participants. The market forecast points to a contraction of 0.8%. A weaker-than-expected print could make it difficult for the DXY to extend its advance. On the flip side, a surprise increase in sales could revive hopes for the economic recovery to gather momentum and lift DXY. The US Department of Labor's weekly Initial Jobless Claims data will be featured in the US economic docket as well.
Technical levels to watch for