USD/CAD: Trading the Canadian GDP Apr 2013

Canadian GDP is a measurement of the production and growth of the economy. Analysts consider GDP one the most important indicators of economic activity, and it is always a widely-anticipated release.  A reading which is better than the market forecast is bullish for the Canadian dollar.

Here are all the details, and 5 possible outcomes for USD/CAD.

Published on Tuesday at 12:30 GMT.

Indicator Background

The Canadian GDP is released  monthly and provides an excellent indication of the health and direction of the economy. Traders should pay particular attention to this economic indicator and treat it as a market-mover.

The previous reading improved to 0.2%, edging, the  estimate of 0.1%.  The market prediction for  April calls for another gain of 0.2%.  Will the indicator meet or beat the market estimate?

Sentiments and levels

With the recent rise in the price of oil, the loonie has some support. Also the lower than expected figures in the US helped the C$, but this may backfire. Canada needs a strong US, as it is not that strong on its own and its economy is very dependent on the US.  With both economies churning out weak releases, we could see some stability before the pair resumes its rises. Thus, the overall sentiment is  neutral on USD/CAD towards this release.

Technical levels, from top to bottom: 1.0285, 1.0250, 1.0180, 1.0125, 1.0066, and   1.00.

5 Scenarios

1. Within expectations:  -0.1% to 0.5%. In such a scenario, USD/CAD is likely to rise within range, with a small chance of breaking higher.
2. Above expectations: 0.6% to 0.9%: An unexpected higher reading can send  the pair  well below one support line.
3. Well above expectations: Above o.9%: An  surge in the reading  would push  USD/CAD downwards, and a second support level might be broken as a result.
4. Below expectations: -0.7% to -0.4%:   A lower GDP figure than predicted could cause the  pair to climb and break one level of resistance.
5. Well below expectations:  Below -0.7%. A strong contraction could lead to USD/CAD breaking a second resistance level.

For more on the loonie, see the USD/CAD forecast.

To follow this event live: [do action=”calendar-event” eventid=”6102c587-1e49-4960-8daa-dbc61505ea69″/]