The USD/CAD has seen a brief halt in its advance, as the divergent outcomes of the advanced US GDP q/q data and Canada’s Building Permits data jostle for dominance.
Data from the Bureau of Economic Analysis shows that the US advance quarterly GDP came in at 4.0%, which was short of the market expectation of 4.2% and also less than last quarter’s remarkable recovery of GDP to 33.4%. On the other hand, Building Permits in Canada fell, but not as much as the market expected. Permits fell 4.1%, while the markets predicted a fall of 4.9%.
The divergent nature of the reports have allowed a dropoff from intraday gains for the day. The loonie continues to trail the greenback by 0.36% on the day as of the time of writing.
Technical Outlook for USD/CAD
The USD/CAD has only seen a slight stall in the progression of price action, as the lower-than-expected GDP data appears to have briefly halted the greenback’s advance. The intraday violation of 1.28422 is still intact. A breakout requires a double successive closing penetration above this level by two daily candles. Breakout confirmation brings in 1.29241 into the picture, with the potential of 1.29953 also becoming a target as price aims for completion of the measured move from the wedge breakout.
On the flip side, failure to break 1.28422 could lead to a rejection and pullback, testing 1.28342 and 1.27831 along the way. Further retreat to 1.27315 is also possible under these circumstances, which then sets up the potential for a bounce and continuation of the breakout move from the wedge’s upper border.
USD/CAD Daily Chart