USD/CAD recover from daily lows, rapproaches 1.25 ahead of Fed's Beige Book
The USD/CAD pair came under a renewed selling pressure during the NA session and lost more than 20 pips in the last hour to drop to a daily low at 1.2474. However, the pair didn't have a difficult time reversing course as the commodity-sensitive loonie weakened amid falling crude oil prices. As of writing, the pair was trading at 1.2495, down 0.2% on the day.
Although the weekly crude oil stock report released by the U.S. Energy Information Administration (EIA) showed an inventory drawdown of 5.7 million barrels, the barrel of West Texas Intermediate plummeted below the $52 handle. At the moment, the barrel of WTI was trading at $51.90, virtually unchanged on the day. An Iraqi official from the oil ministry recently said that the production in the country would return to normal levels within 24-hours.
On the other hand, after refreshing its highest level in 9 days at 93.65, the US Dollar Index lost traction and erased the majority of its daily gains in the American trading hours after the data from the U.S. came below the market estimates. Meanwhile, FOMC members Kaplan and Dudley delivered their speeches at an event in New York but failed to receive any reaction from the markets as they didn't offer anything new on the monetary policy outlook. At the moment, the index is at 93.40, up 0.04% on the day.
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The next catalyst for the buck could come later in the session when the Fed releases its Beige Book at 18:00 GMT. An optimistic outlook from the report could help the DXY push higher.
Technical outlook
Despite this recent fluctuation, the pair is struggling to find direction in the short-term, and the RSI indicator on the daily graph continues to show a neutral stance as it stays near the 50 mark. The first technical support for the pair could be seen at 1.2470 (daily low/20-DMA), 1.2400 (50-DMA) and 1.2335 (Sep. 27 low). On the upside, resistances align at 1.2555 (Oct. 10 high), 1.2635 (Aug. 30 high) and 1.2665 (Aug. 31 high).