Weaker GDP spike momentum slows
The Canada GDP for the month came in weaker at -0.5% (for Sep) vs. 0.0% estimate. The YoY was also lower at 0.0% vs 0.4%.
That combination sent the USDCAD sharply higher. Within the 1st minute after the release, and the price reached the peak at 1.3393. That type of rise can be dangerous, if the correction lower, does not lead to a move back higher shortly thereafter. Why? Trader who bought because of the fundamental reason, get no satisfaction They buy dips and still nothing. The only ones winning are the longs from below and they become uncomfortable too.
The price decline so far, has been able to hold between the 38.2-50% which is my proxy for bullish/bearish. Stay above and all is ok. There is work to do above (like make a higher high) but it is ok. Move below and all may not be all that great as longs post report throw in the towel. The 50% of the day is at 1.3352. That is my line in the sand to eye now.
