The US Dollar (USD) inched higher against the Canadian Dollar (USD) on Thursday, increasing the price of USD/CAD to more than 1.3350 following the Canada’s Gross Domestic Product (GDP) news release. The technical bias remains bearish because of a lower low in the recent downside move.
Technical Analysis
As of this writing, the pair is being traded around 1.3381. A support may be seen near 1.3300, the trendline support area as demonstrated in the given below daily chart with brown color. A break and daily closing below the 1.3300 trendline support shall incite renewed selling interest, validating a move towards the 1.3067 support zone which is another critical support zone.
On the upside, the pair is expected to face a hurdle near 1.3357, the intraday high of yesterday ahead of 1.3387, the high of last major upside rally and then 1.3600, the high of 28th December, 2016 as marked with red color in our chart. The technical bias shall remain bearish as long as the 1.3600 resistance zone is intact.
Canada’s GDP News
The Canadian economy grew at a faster pace than expected in the final quarter of last year, lifted by consumer spending and a rebound in activity in the housing market, while imports tumbled, data from Statistics Canada showed on Thursday. Gross domestic product grew at an annualized 2.6 percent in the fourth quarter, beating economists’ forecasts for 2.0 percent. Still, that marked a slowdown from an upwardly revised 3.8 percent in the third quarter as the economy recovered from the impact of wildfires in Alberta earlier last year. An increase in net trade contributed to the fourth quarter’s performance as imports tumbled, giving back gains seen in the third quarter due to one-time factors related to an east coast oil project.
Trade Idea
Considering the overall technical and fundamental outlook, buying the pair around current levels appears to be a good strategy.