4Q Canada GDP better than expectations
The USDCAD has fallen after the better than expected Canada GDP (for a review CLICK HERE). The price decline has taken the pair below trend line and 100 hour MA (blue line in the chart below at 1.2486 currently) on the surprise (the prior quarter was revised higher as well). The Bank of Canada will keep rates unchanged tomorrow. The sellers should keep a lid on it for now.
Looking at the 5 minute chart below, the price should find sellers at the 1.2470 to 1.2482 area. This is the 38.2 to 50% retracement of the last trend the pair. The lows from yesterday's trade also come in this area. If sellers are to remain in control, they should enter/defend against this risk defining area.
Taking a longer-term view, the USDCAD has been in a consolidated range for the last month and a half of trading. A lower support trend line comes in at 1.2395 . A break below this level will be eyed by sellers as confirmation the top is in place... Other lows at 1.2351/61 and 1.2315 will also need to be broken if the sellers are to take more control.
Admittedly, the daily chart is still forming a bull flag. However, not all bull flags play out as expected. Nevertheless, it still highlights the work that needs to be done by the sellers if they are to take more control of the bias from the bulls.
First things first...the data today,should find sellers on rallies.
