USD/CAD dips and rebounds, back near 1.3300 mark post-Canadian GDP
- A combination of factors helped USD/CAD to regain some traction on Friday.
- Canadian GDP expanded 0.1% MoM and 1.3% YoY, down from 3.7% YoY prior.
- A modest pickup in the USD demand, weaker oil prices remained supportive.
The USD/CAD pair drifted back closer to the lower end of its daily trading range post-Canadian GDP, albeit quickly recovered thereafter.
According to the latest data released this Friday, the Canadian economy recorded a modest 0.1% MoM growth in October. Meanwhile, the annualized quarterly growth rate came in slightly better-than-expected, at 1.3% vs. 1.2% expected, and turned out to be the only factor exerting some pressure.
A combination of factors remained supportive
Despite slightly better-than-expected reading, the quarterly rate marked a significant deceleration from 3.7% growth recorded in the previous quarter. This coupled with a mildly softer tone surrounding crude oil prices kept a lid on any strong rally for the commodity-linked currency – loonie.
Adding to this, a goodish pickup in the US dollar demand, though lacked any obvious fundamental catalyst and seemed rather unaffected by a subdued action around the US Treasury bond yields, further collaborated towards limiting any meaningful pullback for the major.
Looking at the broader picture, the pair remained confined well within a broader trading range held over the past one week or so and has been pivoting around the very important 200-day SMA. Hence, it will be prudent to wait for a sustained break through the recent range before positioning for the next leg of a directional move.
Technical levels to watch