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USD/CAD Outlook: 1.2400 mark holds the key for bulls, Canadian GDP/US macro data eyed

A combination of factors dragged USD/CAD lower for the second straight session on Thursday. COVID-19 jitters helped revive demand for…

By financial2020myday , in Forex , at July 30, 2021

A combination of factors dragged USD/CAD lower for the second straight session on Thursday.
COVID-19 jitters helped revive demand for the safe-haven USD and limit any further losses.
Investors now eye Canadian GDP, US Core PCE Price Index for some short-term trading impetus.
The USD/CAD pair extended the previous day’s rejection slide from the very important 200-day SMA and witnessed heavy selling for the second consecutive session on Thursday. The downward trajectory dragged the pair to over two-week lows and was sponsored by a combination of factors. The Fed Chair Jerome Powell’s dovish remarks on Wednesday continued weighing on the US dollar, which was further pressured by a slight improvement in the global risk sentiment and dismal US macro data. During the post-meeting press conference, Powell emphasised that they were some ways away from substantial progress on jobs. Powell was also cautious about tapering and said that it will take a few more meetings before the Fed starts slowing its massive monetary support.

Meanwhile, the market fears over the impact of China’s regulatory crackdown on various sectors eased after authorities held a call with executives from global investors on Wednesday. According to people familiar with the matter, the hastily arranged call was to reassure the groups that the education policies were not intended to hurt companies in other industries. The news boosted investors’ appetite for perceived riskier assets, which was evident from a generally positive tone around the equity markets. This, in turn, was seen as another factor that weighed on the perceived safe-haven greenback. Bulls failed to gain any respite following the disappointing release of the US macro data – the Advance second-quarter S GDP report and Initial Weekly Jobless Claims.

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