The Gross Domestic Product of Canada in June dropped by 0.5%, worse than 0.4% expected. This more than erases the gain of 0.2% seen in June and leaves a bad taste.
The drop in GDP adds to other weaker figures, and cements the rise of USD/CAD above the battle line of 0.5%.
The Canadian dollar already suffered quite a few weak releases in Canada, including the retail sales numbers and inflation data. Also wholesale sales were disappointing. Even though this week’s trade numbers were OK, this isn’t enough to calm markets.
In addition, oil prices have lost their momentum after a possible airstrike on Syria lost its momentum. The British parliament didn’t give its support for action. Canada is a major oil exporter.
USD/CAD has been battling above 1.05 for quite a while. It traded above 1.0520 towards the publication and rose to 1.0550 in a knee-jerk reaction immediately afterwards.
1.0550 serves as resistance, and the most important line is 1.0660. Below, 1.05 serves as support and 1.0446 follows. For more, see the USDCAD forecast.
And, here is some interesting technical analysis: USD/CAD: Price Could Extend Up To 1.0650 (Elliott Wave Analysis)