“¢ Canadian GDP unexpectedly contract by 0.1% m/m in March.
“¢ The upside remains capped amid weaker USD/rallying oil prices.
“¢ Traders now eye US economic data for some short-term impetus.
The USD/CAD pair recovered a major part of its early lost ground in reaction to the latest disappointment from Canadian GDP print, albeit lacked follow-through.
The pair witnessed a dramatic turnaround and quickly rallied around 40-pips following the disappointing release of monthly Canadian GDP print, showing that the economy contracted 0.1% in Feb. as compared to a robust 0.3% growth recorded in the last month.
Adding to this, Canadian Raw Materials Price Index (RMPI) also fell short of market expectations and came in at 2.8% as against a rise of 3.9% expected and 3.0% previous, which eventually exerted some additional downward pressure on the Canadian Dollar.
The uptick, however, lacked any strong follow-through and remained capped below the 1.3480 supply zone amid the prevalent US Dollar selling bias and a goodish up-move in crude oil prices, which tends to underpin demand for the commodity-linked currency – Loonie.
Next on tap will be the US economic docket, featuring the release of Chicago PMI, the Conference Board’s consumer confidence index and pending home sales data, which will be looked upon to grab some short-term opportunities during the US trading session.
Technical levels to watch
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