The US Dollar (USD) inched higher against the Canadian Dollar (CAD) on Friday, increasing the price of USD/CAD to more than 1.3300 ahead of the Canada’s Gross Domestic Product (GDP) news. 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 1.3339. A hurdle can be seen near 1.3347, an immediate trendline resistance ahead of 1.3369, a junction of double trendline resistance levels as marked with brown colors in the given below hourly chart. A break and hourly closing above the 1.3369 resistance shall trigger fresh buying pressure, opening door for a move towards the 1.3600 resistance, the high of 28th December, 2016 as marked with the red box in our chart.
On the downside, a support may be seen near 1.3329, the 38.2% fib level ahead of 1.3321, a major horizontal support and then 1.3276, the low of the last major downside move as demonstrated in the given above daily chart. A break and daily closing below the 1.3276 support shall incite renewed selling interest, validating a move towards 1.3067 which is another critical support zone. The technical bias shall remain bullish as long as the 1.3276 support zone is intact.
Canada Gross Domestic Product
Statistics Canada is due to release the Canada’s GDP data today during the US trading session. According to the average forecast of different economists, the Canadian economy grew at 0.3% in January as compared to the same growth rate in the month before. Gross Domestic Product (GDP) measures the annualized change in the inflation-adjusted value of all goods and services produced by the economy. It is the broadest measure of economic activity and the primary indicator of the economy’s health. Canada releases fresh GDP data on a monthly basis.
A higher than expected reading should be taken as positive/bullish for the CAD, while a lower than expected reading should be taken as negative/bearish for the CAD.
Trade Idea
Considering the overall technical and fundamental outlook, buying the pair around current levels can be a good strategy in short to medium term.
