By Ketki Saxena
Investing.com -- The Canadian dollar gained against its US counterpart today, ahead of tomorrow's all important US CPI release, supported by a rally in crude prices, and robust domestic economic data as Canada wide building permits increased in value.
Building Permits from Canada from July unexpectedly rose by 6.1% MoM, compared to market expectations for a 3.5% decline.
Meanwhile, WTI crude prices rallied, rising above $84.00 for the first time since November 2022, providing support for the commodity linked Canadian currency.
The US Dollar meanwhile weakened against a basket of currencies, in part due to a reported sell off on the greenback by state-owned Chinese banks, and ahead of a CPI report tomorrow that is expected to reinforce the cooling inflation narrative and bets that the US Federal Reserve is nearing the end of its rate hike cycle.
On a technical level for the pair, analysts at FX Street note the USD/CAD outlook looks "neutral to bullish for the short term as the bulls gain momentum. The Relative Strength Index (RSI) points north above its middle point, while the Moving Average Convergence (MACD) histogram displays larger green bars."
"Plus, the pair is above the 20 and 100-day Simple Moving Averages (SMA) but below the 200-day SMA, suggesting that on the bigger picture, the bulls are still in command over the bears but still need to overcome the 1.3500 level to confirm to upside."
Support levels are set at 1.3450, 1.3400,1.3320, while resistance is targeted at 1.3500 (200-day SMA), 1.3550, 1.3570.