The USDCAD held steady above 1.3150 on softer-than-expected Canadian GDP data for August. Canadian GDP data showed a 0.1% increase; lower than the 0.2% that the market was expecting but higher than the previous figure of 0.2%.
However, underlying fundamentals in the data report paint a better picture. Manufacturing output improved and labor market conditions are still generally good. GDP may actually have been much higher if the maintenance issues that have led to softer commodities output, as well as the drop in utilities output were factored out of the equation.
The USDCAD continues to have bullish bias after an unexpectedly dovish statement from the Bank of Canada. The pair is currently trading around the 1.3147 central pivot, after hitting intraday highs of 1.3178.
Technical Outlook for USDCAD
The USDCAD’s intraday central pivot is the 23.6% Fibonacci retracement from the swing high of May 31 to the swing low of July 19. This area forms the immediate support, as yesterday’s daily candle broke through this area to the upside, came close to the price level of today’s intraday R1 pivot, and retreated.
The bullish bias on the pair support buying on the dips. A bounce from the central pivot could open the door to 1.32204 (high of June 21 and Oct 16, as well as 38.2% Fibonacci retracement line) and above this area, 1.3282 (50% Fibonacci line).
A breach below the central pivot takes the USDCAD back to 1.3086 (S1 pivot and previous highs of June 16/17).