USD/CAD extends slide toward 1.2450 ahead of US GDP data

• USD/CAD fell to a fresh two-week low on Thursday.
• USD remains on the back foot following Wednesday's FOMC event.
• Focus shifts to second-quarter GDP data from the US.

After closing in the negative territory on Wednesday, the USD/CAD pair continues to push lower amid broad-based USD weakness on Thursday. Currently, the pair, which touched a two week low of 1.2449, is trading at 1.2470, losing 0.45% on a daily basis.

DXY drops to fresh monthly low

The US Federal Reserve decided to leave its policy settings unchanged, as expected, following its July meeting. During the press conference, however, FOMC Chairman Jerome Powell adopted a cautious tone and signalled that they will be patient with regard to asset tapering. Powell's dovish remarks triggered a USD selloff and the US Dollar Index (DXY) dropped below 92.00 for the first time since June 29. At the moment, the DXY is down 0.25% on the day at 92.04.

Fed Quick Analysis: Powell only takes a baby step toward tapering, why the dollar could dive.

Later in the session, the US Bureau of Economic Analysis will release its first estimate of the annualized Gross Domestic Product growth for the second quarter. Investors expect the data to show an expansion of 8.6%. 

Other data releases from the US will include June Pending Moe Sales and Initial Jobless Claims for the week ending July 24.

Meanwhile, the barrels of West Texas Intermediate (WTI) continues to trade in a tight range above $72 on Thursday, allowing the USD's market valuation to drive USD/CAD's movements.

Technical levels to watch for