Canadian Dollar Consolidates Ahaed of GDP News
The US Dollar (USD) inched higher against the Canadian Dollar (CAD) on Friday, increasing the price of USD/CAD to more than 1.3600 ahead of some key economic releases from the US and Canada. The technical bias remains bullish because of a higher high in the recent upside move.
Technical Analysis
As of this writing, the pair is being traded around 1.3639. A hurdle can be seen near 1.3669, the high of the recent upside move as demonstrated in the given below hourly chart. A break and hourly closing above the 1.3639 resistance shall trigger fresh buying pressure, opening the door for a move towards the 1.3700 resistance which is a psychological level.
On the downside, a support may be seen near 1.3600, the confluence of 23.6% fib level as well as horizontal support ahead of 1.3575, the trendline support as demonstrated with black color in the given above hourly chart and then 1.3500, the psychological number. The technical bias shall remain bullish as long as the 1.3500 support zone is intact.
How USDCAD Reacted on Canada’s GDP Releases in Past?
The USDCAD fell by more than 40 pips after the release of Canada’s GDP report on 31st March, 2017. The actual outcome was 0.6% as compared to the forecast of 0.3%.
The pair, however, didn’t show any noticeable volatility after the release of February’s GDP report. The actual outcome was 0.3% as compared to the forecast of 0.3%.
Not to mention, the above mentioned volatility in the USDCAD was not influenced solely by the Canada’s GDP release, there were some other important news events as well that contributed in the aforementioned price movement in the pair.
Trade Idea
Considering the overall technical and fundamental outlook, buying the pair around current levels appears to be a good strategy in short to medium term.
What Assets to Trade?
In addition to USDCAD, trading CADJPY, GBPCAD and CHFCAD can be a good strategy as the aforementioned pairs are highly reactive to the Canada’s economic releases.