• CAD boosted with Q2 GDP growth.
  • Medium-term potential support zone remains between 1.2360 and 1.2320 levels.
  • The strong GDP data supports another BoC rate hike in September.

Canada GDP grew 0.3% (forecast 0.1%) in June 2017, rising for the eighth month in a row reported by Statistics Canada on Thursday session. Since June 2016, Canada GDP has grown every month.

June 2017  GDP summary:

  • June 2017 GDP growth led by Construction sector, grew 2.0% posting its largest gain since July 2013.
  • The retail trade sector grew for the sixth month in a row, up 0.8%.
  • The transportation and warehousing sector (+0.6%) expanded in June, up for the fourth month in a row.
  • Accommodation and food services rose 0.8% in June, led by 1.4% growth in accommodation services.
  • Manufacturing edged up 0.2% in June.
  • The wholesale trade sector declined 0.4% in June following six consecutive months of growth.
  • Mining and quarrying edged down 0.2% in June following three months of increases.

The CAD rallied across the board, grew more than a percent against GBP,USD and NZD, against EUR and JPY rose 0.90% and against CHF rose 0.60%.

Key points:

  • USDCAD resistance moved down to 1.2660 from 1.2780.
  • NZ election likely to raise the down side risk to NZDCAD.
  • CADJPY spotted with a weekly bullish pattern.

TECHNICAL VIEW

USDCAD rose 2.3% in the first half of the month and completely wiped out the gains in the second half. It has a support zone remains between 1.2440 and 1.2400 below this 1.2350 exists in the near term.

Medium-term potential support zone remains between 1.2360 and 1.2320 levels.

The daily and weekly RSI making a higher low and the oscillators remain bullish. We can draw a conclusion with the combination of daily and weekly RSI/RVI that, the selling likely to be arrested between 1.2400-1.2350. The resistance moved down to 1.2660 from 1.2780.

FX markets focus on today’s US August NFP. Ahead of the major event, USDCAD sits tad above 200WMA.

  • Intraday trading resistance seems at 1.2550/1.2560, 1.2600 and 1.2690.
  • Intraday trading supports moved to 1.2440, 1.2400 and 1.2350.

Also read other CAD crosses technical views:

NZDCAD: Spotted with a classic bearish H&S shoulder

CADJPY: Spotted with an inverse H&S pattern on the weekly chart.

It is important to always keep in mind the risks involved in trading with leveraged instruments.

What is your Technical View?

Do you have a different idea? Please leave us a comment and get an answer from our professional analysts.