The Gross Domestic Product (GDP) is a measurement of the production and growth of the economy. Analysts consider GDP one the most important indicators of economic activity and the direction of the Canadian economy. 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 Friday at 12:30 GMT.
The Canadian GDP is released monthly and is a key economic indicator. Traders should pay particular attention to the indicator, as an unexpected reading could affect the direction of USD/CAD.
GDP has been showing very modest growth recently, with a previous reading of 0.2%. The markets are expecting a slight drop in September, with an estimate of 0.1%.
Sentiments and levels
The recent drop in the price of oil is bearish for the loonie, and more trouble in the US economy would translate into weaker demand for Canadian goods and resources. On the other hand, Canada is still enjoying QE3 and a relatively sound economy. Thus, the overall sentiment is neutral on USD/CAD towards this release.
Technical levels, from top to bottom: 1.00, 0.9950, 0.99, 0.9817, 0.9729 and 0.9667.
- Within expectations: -0.2% to 0.4%. In such a scenario, USD/CAD is likely to rise within range, with a small chance of breaking higher.
- Above expectations: 0.5% to 0.8%: An unexpected higher reading can send the pair well below one support line.
- Well above expectations: Above 0.8%: An unexpected surge in the reading would push USD/CAD downwards, and a second support level might be broken as a result.
- Below expectations: -0.6% to -0.3%: A lower GDP figure than predicted could cause the pair to climb and break one level of resistance.
- Well below expectations: Below -0.6%. In this scenario, the loonie could take a hit, and USD/CAD could break a second resistance level.
For more on the loonie, see the USD/CAD forecast.Get the 5 most predictable currency pairs