USD/CAD sticks to gains above 1.29 ahead of BoC's Poloz's speech

• Today's data from Canada revealed that the GDP contracted 0.1% in August.
• The USD/CAD pair recorded a quick 70-pip jump on data.
• The BoC Governor Stephen Poloz to testify before the parliament at 19:30 GMT.

After spending the first half of the day in a tight range above the 1.28 handle, the USD/CAD pair jumped above 1.29 in the early NA session as the loonie weakened against its peers on disappointing macroeconomic data from Canada. As of writing, the pair is trading at 1.2902, gaining 0.5% on the day.

Canadian economy loses momentum

On Tuesday, the Statistics Canada announced that amid declines in manufacturing, mining, quarrying and oil and gas extraction activity, the real gross domestic product (GDP) edged down 0.1% in August. Moreover, other data revealed that despite higher prices for energy and petroleum products, the Industrial Product Price Index (IPPI) declined 0.3% in September. In the meantime, after failing to preserve its daily gains on Monday, the barrel of West Texas Intermediate inched higher above the $54 handle, helping the commodity-sensitive loonie limit its losses for the time being. 

• Canada: Real GDP edged down 0.1% in August
• Canada: The Industrial Product Price Index (IPPI) declined 0.3% in September

On the other hand, before the FOMC publishes its monetary policy statement tomorrow, the greenback is staying in a consolidation phase with the US Dollar Index staying flat near mid-94s. Later in the session, Stephen Poloz, Governor of the Bank of Canada, will testify before the Parliament. A dovish tone from Poloz is likely to help the pair stretch its daily upside.

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Technical outlook

Although the RSI indicator on the daily graph shows overbought conditions above the 70 mark, Poloz's speech as a fundamental catalyst could allow investors to ignore that in the near-term. The immediate hurdle for the pair aligns at 1.2915 (Oct. 27 high/daily high), 1.2970 (200-DMA) and 1.3010 (Julç. 7 high). On the flip side, supports could be seen at 1.2820 (daily low), 1.2780 (Oct. 26 low) and 1.2700 (psychological level). 

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