Key Highlights
- The US Dollar traded higher and moved above 1.2750 against the Canadian Dollar.
- There is a major bullish trend line forming with support at 1.2720 on the daily chart of USD/CAD.
- The Canadian GDP in Feb 2018 (MoM) grew 0.4%, more than the forecast of +0.3%.
- Today, the ADP Employment Change for April 2018 will be released, which is forecasted to post 200K.
USDCAD Technical Analysis
The US Dollar started a nice upside move from the 1.2520 swing low against the Canadian Dollar. The USD/CAD pair gained traction and broke a major resistance at 1.2750.
During the upside move, the pair succeeded in settling above the 100 (red) and 200 (green) simple moving averages (daily). There was also a break above the 50% Fib retracement level of the last decline from the 1.3124 high to 1.2521 low.
However, there is a crucial resistance waiting on the upside near 1.2900-1.2920. The stated zone is a key pivot and acted as a hurdle for buyers many times. It now coincides with the 61.8% Fib retracement level of the last decline from the 1.3124 high to 1.2521 low.
Therefore, a break above 1.2900-1.2920 won’t be easy. Should buyers succeed, the pair could move past 1.3000 in the short term. On the flip side, an initial support is at 1.2750. Moreover, there is a major bullish trend line forming with support at 1.2720 on the daily chart.
Recently, the Canadian GDP for Feb 2018 was released by the Statistics Canada. The market was looking for a rise of 0.4% in the GDP compared with the previous month.
The actual result was better as there was a rise of 0.4% in the GDP, well above the last decline of 0.1%. The report added:
The output of goods-producing industries grew 1.2% as manufacturing and construction rose in addition to the rebound in mining and oil and gas extraction. Services-producing industries edged up 0.1% as increases in most sectors more than offset declines in wholesale trade and in the real estate and rental and leasing sector.
Overall, there could be a downside correction in USD/CAD, but the pair remains supported near 1.2750 and 1.2720.
Economic Releases to Watch Today
- Germany’s Manufacturing PMI for April 2018 – Forecast 58.1, versus 58.1 previous.
- Spanish Manufacturing PMI for April 2018 – Forecast 54.2, versus 54.8 previous.
- Euro Zone Manufacturing PMI April 2018 – Forecast 56.0, versus 56.0 previous.
- UK Construction PMI for April 2018 – Forecast 50.5, versus 47.0 previous.
- Euro Zone Gross Domestic Product Q1 2018 (QoQ) (Prelim) – Forecast 0.4%, versus 0.6% previous.
- Euro Zone Gross Domestic Product Q1 2018 (YoY) (Prelim) – Forecast 2.5%, versus 2.7% previous.
- US ADP Employment Change April 2018 – Forecast 200K, versus 241K previous.
