Canadian GDP In Focus
With the BOC the chief hawk among the G10 central banks, the Canadian Dollar is drawing plenty of attention at the moment. With this in mind, today’s GDP release will be closely watched and has the potential to create market volatility on any surprise reading. The market is looking for an unchanged reading of -0.3%, meaning that the bar for an upside surprise is set relatively low. If data come sin above consensus today, this is likely to refocus the market’s attention on further BOC tapering, leading CAD higher in the near term.
Where to Trade Canadian GDP?
Given the Fed’s muted message this week, the monetary policy divergence between the Fed and the BOC is growing, creating room for further downside in USDCAD. Price has now broken below the rising trend line from YTD lows, suggesting the upward correction is over for now and putting focus back on the downside. With RSI turning lower and MACD bearish, while below the 1.2469 level bears can target 1.2368 and 1.2243 thereafter.