How to trade Canada's quarterly GDP with USD/CAD

Canada's quarterly GDP report has a significant impact and moves the C$.
The Market Impact Tool shows trading opportunities in both upside and downside surprises on this event.
The USDCAD moved, on average, 13 pips in the 15 minutes after the data release and 47 pips in the following 4 hours.

Yohay Elam FXStreet

Selling USD/CAD Scenario

Tradable Positive Trigger: +0.82 deviation (3.35) [SELL Pair]
Key Support Level: 1.2880

This time, if it comes out at higher than expected with a relative deviation of 0.82 or higher(3.35 or higher in actual terms), the pair may go down reaching a range of 40 pips in the first 15 minutes and 86 pips in the following 4 hours.

1.2880 was the post NAFTA announcement swing low. 1.2820 supported the pair back in late May. 1.2725 was the low point in May.

Buying USD/CAD Scenario

Tradable Negative Trigger: -0.82 deviation (2.64 ) [BUY Pair]
Key Resistance Level: 1.2960

If it comes out lower than expected at a relative deviation of -0.82 or less(2.64 or lower in actual terms), the USDCAD may go up reaching a range of 40 pips in the first 15 minutes and 84 pips in the following 4 hours.

1.2960 supported the pair in early August. 1.3045 provided support to the pair in mid-August. Further up, 1.3100 held the pair down before the fall in late August.

USD/CAD Levels on the Chart

More data

Canada releases GDP more frequently than other countries, once every month. The quarterly release carries more weight. The read for Q2 is expected to show a bounce in the economy after a slow first quarter.

See Canadian GDP Preview: Rebound growth numbers eyed by the BOC, NAFTA fate feared

In the last five releases, the USDCAD moved, on average, 13 pips in the 15 minutes after the data release and 47 pips in the following 4 hours. The previous release had a negative surprise of -1.15 regarding relative deviation, and the USDCAD reached an 11 pip range in the first 15 minutes and a range of 39 pips 4 hours after that.

Follow the publication of the figure on the economic calendar. Watch out for the data from the Market Impact tool, projecting the potential price changes according to the deviation. Here is the Market Impact Studies Users Guide.

Author

Yohay Elam

FXStreet

Yohay is in Forex since 2008 when he founded Forex Crunch, a blog crafted in his free time that turned into a fully-fledged currency website later sold to Finixio.

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