USD/CAD rebounds from multi-month lows, trades above 1.3770

• USD/CAD fell toward 1.3700 in early American session.
• Canadian data showed GDP contracted by 7.2% in April.
• US Dollar Index erases small portion of early losses.

The USD/CAD pair dropped to its lowest level since early March at 1.3713 during the early trading hours of the American before staging a decisive recovery. As of writing, the pair was up 0.1% on a daily basis at 1.3775.

Canadian economy contracts at a softer pace than expected

The data published by Statistics Canada on Friday showed that the real Gross Domestic Product (GDP) in April contracted by 7.2% on a monthly basis. This reading came in better than the market expectation for a fall of 9% and helped the CAD gather strength.

Meanwhile, crude oil prices struggled to build on Thursday's gains and made it difficult for the loonie to remain resilient against its rivals. Ahead of weekly Baker Hughes data, the barrel of West Texas Intermediate is down 0.6% at $33.40.

On the other hand, the data from the US revealed that Personal Spending in April declined by 13.6% but Personal Spending, boosted by unemployment benefits and federal government's recovery plan, rose by 10.5%.

Although the initial market reaction caused the US Dollar Index (DXY) to edge lower, the poor performance of Wall Street caused the greenback to start erasing its losses. At the moment, the DXY is still down 0.28% on the day at 98.20.

Later in the day, US President Donald Trump will be hosting a news conference on China. If US-China tensions continue to escalate during the presser, a negative reaction in crude oil prices could allow the pair to continue to push higher.

Technical levels to watch for