Canada GDP preview: What to expect of USD/CAD?

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Dec 23, 2015.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
    Likes Received:
    FXStreet (Mumbai) - The USD/CAD pair is in a sideways to pattern since Dec 17th and currently trades below the hourly 100-MA at 1.3933 ahead of the Canadian GDP, retail sales and the US personal spending data release.

    Canada GDP rebound could trigger a recovery in CAD

    The Canadian dollar has been heavily offered in line with the fall in the oil prices after the OPEC group lifted its output ceiling at the December 4 meeting. Consequently, the currency appears oversold (USD/CAD is overbought) on the technical charts. However, a rebound in the Canadian GDP (expected 0.3%) could help the oversold CAD take back a minor part of its losses.

    Focus on US household and corporate spending

    A probability of the technical correction in the CAD (due to rebound in Canada GDP and retail sales) may be wiped out of the US personal spending and durable goods orders (corporate spending) numbers print higher than estimates. On the other hand, a weaker US data and a positive Canadian data could trigger a sharp correction in the USD/CAD pair.

    USD/CAD Technical Levels

    At 1.3906, the immediate support is seen at 1.39, under which the pair could drop to 1.3836 (hourly 200-MA). A break below the same would expose 1.3726 (23.6% of 1.2832-1.4002). On the other hand, a break above 1.3934 (daily high) would expose 1.3964 (previous day’s high). A break higher would open doors for a re-test of the recent multi year high of 1.4002.
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