USD/CAD Rallies amid US GDP Data

The US Dollar (USD) extended its winning streak against the Canadian Dollar (CAD) on Wednesday, increasing the price of USDCAD to more than 1.3200 amid some key economic news. The technical bias remains bearish because of a lower low in the recent downside move.

Technical Analysis

As of this writing, the pair is being traded near 1.3220. A support may be noted around 1.3150, the psychological number ahead of 1.3028, the confluence of a couple of trendline support zones as demonstrated in the given below daily chart. A break below the 1.3028 support shall incite renewed selling pressure, validating a move towards the 1.2950 support area.

On the upside, the pair is likely to face a hurdle around 1.3283, the 50% fib level ahead of 1.3300, the psychological number. The technical bias shall remain bearish as long as the 1.3283 resistance area is intact.

US Gross Domestic Product

U.S. economic growth slowed in the fourth quarter as previously reported, with robust consumer spending offset by downward revisions to business and government investment. Gross domestic product rose at a 1.9 percent annual rate in the final three months of 2016, the Commerce Department said on Tuesday in its second estimate for the period. That matched the estimate published last month. Output increased at a 3.5 percent rate in the third quarter.

Trade Idea

Considering the overall technical and fundamental outlook, buying the pair around current level appears to be a good strategy in short to medium term.'
Usman Ahmed

Usman Ahmed is an individual forex trader and market analyst. He holds a Masters of Business Administration (MBA) degree. His work includes fundamental and technical reports on various currency pairs, commodity futures and stock markets. His technical analysis features price action strategies.

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