USD/CAD flat despite strong Canadian data

The Canadian dollar’s mini-rally has taken a pause on Thursday. In the North American session, the pair is trading at 1.3306, down 0.11% on the day. After a quiet start to the week, USD/CAD dropped by o.50% on Wednesday, its sharpest one-day fall since early September.

Canada Manufacturing PMI accelerates

Canada’s manufacturing sector continues to recover after a difficult second quarter. The Manufacturing PMI accelerated for a fifth successive month in September, with a reading of 56.0 points, well into expansionary territory. The PMI has steadily rebounded since a poor reading of 33.0 in May, which indicated a sharp contraction. A strong manufacturing sector is critical in order for the economic recovery to gain traction. There was more positive economic data on Thursday, as Building Permits rebounded in August with a gain of 1.7%. This follows a reading of -3.0% in the previous reading.

Canada’s economy grows for a third consecutive month in July, with a gain of 3.0%. This figure was just above the forecast of 3.0%, and the positive reading propelled the Canadian dollar higher on Wednesday.

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USD/CAD Technical

• 1.3391 is the next resistance line. This is followed by resistance at 1.3464
• 1.3272 is a weak support level. Below, there is support at 1.3228
• USD/CAD broke below the 10-day MA line on Wednesday, which indicates a downward trend for the pair