The pair USD/CAD started to build a bullish momentum early in the american session after data from Canada did not comply with the expectations of the market.
At this time, the pair is trading at 1.2485, gaining 0.4% on the day. According to the latest data published by the Statistical Institute of Canada, the Index of Prices of Industrial Products (IPPI) decreased by 1.0% in June, after rising 0.1% (revised from -0.2%) in may.
On the other hand, the Price Index of Raw Materials (RMPI) declined by 3.7% for the same month and both data came in below consensus of the market. More details of the report revealed that the decrease of the IPPI and RMPI were caused by lower prices for energy and petroleum products. Meanwhile, the loonie is linked to commodity is struggling to find demand as the price of a barrel of WTI oil remains in negative territory below the critical level of $ 50.
On the other hand, the index of the dollar of EE.US are holding on to their daily gains modest on Monday amid a lack of catalysts fundamental. Later in the session, Chicago PMI and the data, sales of homes pending in the united States will be considered for a new momentum. By the time, the DXY is at 93.30, up 0.12% on the day.
The pair could extend its correction to the upside if it makes a daily close above 1.2500 (psychological level/DMA 10). Above this obstacle, it might point 1.2570 (maximum of 27 July) and 1.2620 (DMA 20).
On the negative side, 1.2415 (low of 27 July), 1.2365 (minimum of 2 of June of 2015) and 1.2300 (psychological level) could be considered as technical supports. The RSI on the 4 hours chart it recently moved above the level of 50, suggesting that the time uptrend is building up in the short term.