USD/CAD extends higher toward 1.31 as greenback continues to gather strength

• US Dollar Index recovers above 94.50 following the ECB press conference.
• WTI treads water above $69 on Thursday.
• Markets ignore the disappointing macroeconomic data releases from the U.S.

The USD/CAD pair broke above its daily range in the early trading hours of the American session on the back of a stronger greenback. At the moment, the pair was trading at 1.3080, adding 35 pips, or 0.26%, on the day.

The data from the United States on Thursday showed that the trade deficit increased to $68.33 billion in June from $64.85 billion in May and failed to match the market expectation of $67 billion. On the other hand, following May's 0.3% contraction, durable good orders increased by 1% in June, which again came in below the experts' estimate of 3%. Despite the dismal figures, however, the US Dollar Index gained traction in the early NA session and rose above the 94.50 mark to erase all of its losses from the previous day.

The market reaction to the comments from the ECB Governor Mario Draghi weighed on the shared currency and ramped up the demand for the greenback as investors' attention returned to the monetary policy divergence between the Fed and the ECB. As of writing, the DXY was up 0.5% on the day at 94.67.

On the other hand, after closing the first three days of the week higher, the barrel of WTI lost its bullish momentum but didn't have a difficult time preserving its weekly upside to help the commodity-linked CAD to limit its losses against the buck. At the moment, the barrel of WTI was up 0.1% on the day at $69.30.

Technical outlook

The initial resistance for the pair aligns at 1.3120 (50-DMA) ahead of 1.3170 (Jul. 23 high) and 1.3285 (Jul. 19 high). On the downside, supports could be seen at 1.3000 (psychological level), 1.2960 (100-DMA) and 1.2915 (Jun. 8 low).