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Market Update

EncoreFX’s daily market updates are written by our experienced and professional dealing team.

Canadian GDP, Slew of Key US Data on Tap for USDCAD Traders

Published September 30, 2016
  • USDCAD is comfortably in the mid 1.3100's this morning, slightly higher to yesterday's close ahead of a data deluge from Canada and the US starting at 830am ET 
  • The Loonie is at risk of a very volatile month/quarter end, as Canada reports GDP for July which is forecast to come in at +0.3%
  • A downside miss could raise the possibility of the BoC taking a dovish turn in the near future; the Canadian economy has been misfiring on all cylinders lately and a GDP contraction could raise speculation of a rate cut or other non-conventional measures to shore up a sputtering growth profile
  • Initial support and resistance levels for USDCAD traders to watch for are Thursday's 1.3040 low and Monday's 1.3280 high; a break of either of those levels would signal a near term shift in direction with the bias at present being to the topside (USD strength)
  • The US reports Personal Income, Consumption, Core PCE, Chicago PMI and Consumer Sentiment this morning so there is the potential for some wild swings today with risks heightened; it is month and quarter end which could cause some odd market moves as positions are squared for reporting purposes 
  • Oil is -0.4% lower thus far, to $47.65, just under the high for September
  • The tentative deal among OPEC producers is garnering lots of skepticism; key questions remain as to whether they can hold it together before meeting again in November to ratify the proposal
  • The fact remains that the physical crude market is well supplied and this token cut from OPEC may not be enough to significantly affect the supply/demand imbalance
  • Lots to consider heading into Q4 for USDCAD traders, so prepare as best you can!

Charts: (1) USDCAD initial support/resistance 1.3040 and 1.3280. (2) USDCAD tends to strengthen in Q4: 2012-2015 rebased to zero shows an avg 3.08% gain. (3) Economic Calendar.