USD/CAD challenging 50-DMA near 1.3210; US GDP index 'not that bad' at 2.0%
|Currently, USD/CAD is trading at 1.3215, up +0.27% or 35-pips on the day, having posted a daily high at 1.3226 and low at 1.3164.
Today's US docket had lined up critical news releases as traders and investors expected the US GDP Index that clocked 2.0% 'a worse than expected' figure from 2.1% consensus and previous. Also, GDP annualized clocked another lower result at 1.9% from 2.1% expected consensus, but similar to previous at 1.9%.
Nevertheless, the GDP figures on the surface 'not that bad' extend into a narrative President Trump could easily use to elaborate further stimulus and 'not too far' changes that can boost the US economy far from the anemic conditions its neighbors Canada and Mexico seem to embrace.
USD/CAD: Clean breakout above the resistance levels should prove difficult - Natixis
Historical data available for traders and investors indicates during the last 9-weeks that USD/CAD pair, a commodity-linked currency, had the best trading day at +1.71% (Jan.18) or 227-pips, and the worst at -1.02% (Jan.17) or (133)-pips. Furthermore, the US 10yr treasury yields have traded from 2.37% to 2.35%, down -0.15% on the day at 2.36% or -0.0036.
Technical levels to watch
In terms of technical levels, upside barriers are aligned at 1.3212 (50-DMA), then at 1.3270 (100-DMA) which seems to build a 'Walls of Troy' multi-year resistance region since July 2015 and finally above that at 1.3380 (high Jan.20). While supports are aligned at 1.3082 (low Feb.27), later at 1.2968 (low Jan.31) and below that at 1.2850 (low Sep.8).
On the other hand, Stochastic Oscillator (5,3,3) seems to head north. Therefore, there is evidence to expect further US dollar gains in the near term.The pair requires a close and open above the 200-DMA near 1.3140 to dilute any bearish pressure that could drag it lower back to the 1.3010 level.
On the long term view, if the 'double Doji' candlestick formation from 1.3587 (high Nov.) and 1.3597 (high Dec.) is in fact, a relevant top, then any upside potential seems limited for this currency pair. Then, to the downside, supports are aligned at 1.2986 (short-term 23.60% Fib), later at 1.2626 (long-term 50.0% Fib) and finally below that at 1.2460 (low May.2016).
As of writing, USD/CAD trades around 1.3215, therefore upside barriers are aligned at 1.3311 (short-term 38.2% Fib), then at 1.3468 (long-term 61.8% Fib) and finally above that at 1.3574 (short-term 50.0% Fib).
USD/JPY inter-markets: awaits Trump to resume prior appreciating move?
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