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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.