USD/CAD edges higher towards 1.25 after US data

The USD/CAD pair gathered momentum in the early NA session and started to rise towards the 1.25 handle as the data from the U.S. supported the greenback. At the moment, the pair is trading at 1.2485, up 0.1% on the day.

According to the data released by the Bureau of Economic Analysis on Tuesday, the core PCE price index, the Federal Reserve's favorite inflation measure, remained unchanged at 1.5% in June on a yearly basis, beating the market consensus of 1.3%. However, other data showed that the personal income contracted by $3.5 billion (less than 0.1%) in June while the personal consumptions increased by $8.1 billion (0.1%). After the mixed data, the US Dollar Index continues to hold on to its daily gains. As of writing, the index was at 92.84, up 0.18%, on the day.

• US: Personal income decreased $3.5 billion (less than -0.1%) in June
• US: PCE price index increased less than 0.1%

On the other hand, after spending the majority of the day above the critical $50 mark, the barrel of West Texas Intermediate eased lower and is now trading at $49.85, losing 0.6%, and hurting the demand for the commodity-sensitive loonie. 

Later in the session, Markit will release its PMI data for the manufacturing index in Canada and the United States.

Technical outlook

The pair still needs to make a daily close above the 1.2500 (psychological level) to start a sustained correction move. 1.2570 (Jul. 27 high) and 1.2650 (Jul. 19 high) could be seen as next technical resistances above 1.25. On the downside, 1.2415 (Jul. 27 low), 1.2365 (Jun. 2, 2015, low) and 1.2300 (psychological level) remain as short-term support levels.