Trade the Canadian Dollar on the GDP Data

There isn’t much on the macroeconomic data calendar to move markets this week. However, Canadian dollar traders will be fastening their seatbelts once more early in their trading day today as the latest Canadian GDP data is released. The loonie has taken a battering in recent weeks—and indeed months—against the dollar, and further weak data could push it to notch additional annual lows in the next few trading sessions, especially if the dollar resumes its appreciation in thin holiday markets.

Expectations are for the month-on-month data to show a 0.2% increase in GDP. Traders anticipate that an on-target result or a weaker print could lead to further selling pressure on the CAD. The USDCAD saw some selling on Friday after U.S. inflation data came in weaker than expected. However, it remains within striking distance of the short-term trendline resistance on the hourly chart and the annual high. Any GDP figure softer than 0.1% could bring these resistance levels into play. Meanwhile, support currently sits around the 200-day moving average and the trendline near 1.4250.

Key Levels to Watch:

• Resistance 2: 1.4468 – 2024 High
• Resistance 1: 1.4403 – Trendline Resistance
• Support 1: 1.4279 – 200-Day Moving Average
• Support 2: 1.4245 – Trendline Support

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