USD/CAD advances to fresh monthly highs above 1.3300

  • USD/CAD regained its traction after declining below 1.3300.
  • US Dollar Index is pushing higher ahead of key US data.
  • Markets expect the US economy to show a 31% expansion in Q3.

The USD/CAD pair gained more than 100 pips on Wednesday and staged a technical correction during the first half of the day on Tuesday. After declining to a session low of 1.3275, however, the pair regained its traction and touched its best level since late September at 1.3343. As of writing, USD/CAD was up 0.13% on the day at 1.3336.

Oil selloff weighs on CAD

The heavy selling pressure surrounding crude oil seems to be causing the commodity-related loonie to have a tough time attracting investors. Dragged by heightened worries over a dismal energy demand outlook, the barrel of West Texas Intermediate (WTI) lost more than 4% on Wednesday and extended its slide on Thursday. As of writing, the WTI was trading at its lowest level since early June, losing 3.75% on the day at $35.95.

On the other hand, the greenback preserves its strength against its major rivals ahead of the third-quarter Gross Domestic Product (GDP) data and help USD/CAD push higher. The US Dollar Index, which closed the last three days in the positive territory, is currently gaining 0.2% on the day at 93.63. Markets expect the US economy to show an expansion of 31% on a yearly basis in the third quarter. 

Other data from the US will include Pending Home Sales and the weekly Initial Jobless Claims. Moreover, September Building Permits data will be featured in the Canadian economic docket.

Technical levels to watch for

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