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The USD / CAD plunges to 1.3120 after GDP data in the US and Canada

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USD/CAD dips to 1.3120 after US and Canadian GDP data

Disappointing and readings of Canada’s GDP did not provide any great momentum, with the pair dipping USD / CAD below 1.3150 level to trade now around 1.3120 to 25 region.

The couple witnessed price action shortly after US GDP Advanced estimated economic growth of 1.2% annualized rate in the second quarter of 2016 compared with growth of 2.6% forecast reading.

Meanwhile, the Canadian economy contracted 0.6% during the month of May, which was more consensus estimate a contraction of 0.5%.

In addition to this, the lower than expected increase in raw material prices during the month of June, as reflected in RPMI is seen as a precursor to consumer inflation, now could fuel speculation of further easing of BOC and therefore, could restrict any sharp downslide for the principal.

Traders now await the release of Chicago PMI and revised index of consumer sentiment UM for some short-term momentum play.

Technical levels to see

On the downside immediate swing low near 1.3100 Thursday handle closely followed by 200-day moving average near 1.3080 region seems to act as immediate support. Failure to meet these immediate supports seems to attract fresh selling pressure that could drag the pair towards 1.3000 psychological support mark.

On the other hand, the impulse recovery above 1.3150 level, leading to a break above session high resistance near 1.3190 to 95 area would now confirm the continuation of the short-term upward trajectory of the pair .


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