USD/CAD: Bullish Momentum Continues As Canada GDP Looms

The green back inched higher against the Canadian dollar on Friday, taking the price of USDCAD to more than 1.1385 ahead of Canada’s GDP figure. The technical bias remains bullish due to Higher High on the daily chart.

Technical analysis

As of this writing, the pair is being traded around 1.1386. The pair started the Asian session at 1.1329 and experienced aggressive buying. As a result, the pair broke through the resistance around 1.1365 and is now heading forward to test the 1.1392 handle. Breaking this level could open the doors towards the 1.1366 level to print a fresh yearly high.

On the downside there lies a massive support around 1.1215, the confluence of 38.2% fib level, trend line and 50-day moving average, as demonstrated in the above chart. The said level had stalled the price since last few days.

The trend line and 50-day moving average are moving along which signals sustained bullish momentum in the long term. The overall bias is bullish because of higher lows on the daily chart. The bias will remain bullish as far as the support area around 1.1215 remains intact.

CAD Gross Domestic Product

The gross domestic product of Canada remained at 2.1% for the third quarter, less than that of 3.1% in the same quarter of the previous year, the median projection of different economists says. Scheduled for release today in the US session, a high GDP figure is seen as bullish for the Canadian dollar and vice versa thus a better than expected figure might stall bullish momentum in the price of USD/CAD.

Trade idea

Considering the technical and fundamental outlook, selling the pair could be a good option if the price leaves a bearish pin bar or bearish engulfing pattern on the daily chart.

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