From the beginning of February 2018, there has been a pronounced upward trend on the USD/CAD currency pair. During this period, the Canadian dollar has weakened against the US dollar by more than 4%. The trading instrument has reached a key resistance level of 1.2900. In the near future, a technical correction is not ruled out.
Today, Statistics Canada will publish a report on GDP at 15:30 (GMT+2:00). The gross domestic product is the key indicator of the country's economic health, which has a strong impact on the exchange rate of the national currency.
The latest economic reports from Canada were rather weak. In January, the business activity index from Ivey fell by 8.6% to 55.2. In December, retail sales in the country fell by 0.8%. Experts expect that Canada's economic growth will slow to 0.1% from 0.4% (m/m).
It should be noted that the GDP report will have the decisive importance at the meeting of the Bank of Canada. The two-day meeting of the Central Bank will be held next week, and it is the GDP statistics that can influence the views of the regulator's representatives on the future fate of the monetary policy. We recommend paying attention to the difference between the actual and the forecasted values.
- Support levels: 1.28150, 1.27600, 1.27100
- Resistance levels: 1.28650, 1.29000
At the moment, the USD/CAD quotations are consolidating. Investors expect the publication of data on GDP of Canada. The key support and resistance levels are 1.28150 and 1.28650, respectively. The technical pattern indicates a possible correction of the USD/CAD currency pair. A sufficiently strong reversal formation of the price and MACD histogram divergence has been formed. If the statistics from Canada is optimistic, the USD/CAD quotations may reach the level of 1.27600-1.27000.
An alternative may be the further growth of the USD/CAD currency pair to the round level of 1.29000.