News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
EUR/USD
Bullish
Oil - US Crude
Bullish
Wall Street
Mixed
Gold
Mixed
GBP/USD
Mixed
USD/JPY
Mixed
More View more
Real Time News
  • Gold Price Forecast: Dovish FOMC Could Underpin Bullion Ahead of NFP - https://www.dailyfx.com/forex/fundamental/forecast/weekly/chf/2020/11/27/Gold-Price-Forecast-Dovish-FOMC-Could-Underpin-Bullion-Ahead-of-NFP.html?CHID=9&QPID=917708&utm_source=Twitter&utm_medium=Moss&utm_campaign=twr #Gold #XAUUSD $GOLD $GLD https://t.co/N9ChZOqSdy
  • Forex Update: As of 21:00, these are your best and worst performers based on the London trading schedule: 🇪🇺EUR: 0.42% 🇦🇺AUD: 0.35% 🇳🇿NZD: 0.30% 🇨🇦CAD: 0.20% 🇯🇵JPY: 0.16% 🇬🇧GBP: -0.33% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/4uyJxc09OH
  • Commodities Update: As of 21:00, these are your best and worst performers based on the London trading schedule: Oil - US Crude: 1.48% Gold: -1.28% Silver: -2.80% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/pbfmvnsvuu
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 93.65%, while traders in France 40 are at opposite extremes with 78.02%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/NL3bVphnYH
  • Indices Update: As of 21:00, these are your best and worst performers based on the London trading schedule: FTSE 100: 0.64% Germany 30: 0.04% US 500: 0.00% Wall Street: 0.00% France 40: -0.02% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/uZ1HjcIJ4q
  • GBP/USD continues to fail around the 1.3400 level and is unlikely to make a confirmed break higher ahead of any trade talk confirmation. Get your $GBPUSD technical analysis from @nickcawley1 here:https://t.co/EWLFXK1q3q https://t.co/4XSSNxobMo
  • The Gold price sell-off has broken below key technical barriers and leaves the outlook for XAU/USD weighted to the downside heading into the close of the month. Get your $XAUUSD technical analysis from @MBForex here:https://t.co/3YLcAFlr5f https://t.co/1uFb9UkDvV
  • Commodities Update: As of 19:00, these are your best and worst performers based on the London trading schedule: Oil - US Crude: 1.48% Gold: -1.28% Silver: -2.80% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/OvThGydQBs
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 93.65%, while traders in France 40 are at opposite extremes with 78.02%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/Yq6wLxhblV
  • Vaccine Optimism Sparks 28% Increase in Oil Prices. Get your #crudeoil market update from @JMcQueenFX here:https://t.co/F3AlSkniXk https://t.co/qevY4Gh6o9
CAD Correction on the Cards After Canadian GDP Data

CAD Correction on the Cards After Canadian GDP Data

2018-03-02 10:00:00
Martin Essex, MSTA, Analyst
Share:

CAD TALKING POINTS:

- Canadian GDP data today will likely leave interest rate expectations unchanged.

- However, a brief “sell the rumor, buy the fact” rally is possible before the downtrend in CAD resumes.

Learn how to trade like an expert by reading our guide to the Traits of Successful Traders

TRADING THE NEWS: CANADA GDP

Canada GDP expectations

New to forex and want to find out more about trading CAD? Take a look at our Forex Trading Guides

The Canadian Dollar has continued to weaken against its US counterpart, as predicted here, but a brief rally could follow today’s Canadian economic growth data at 1330 GMT before the downtrend resumes. While the figures will likely leave Canadian interest rate expectations unchanged, a “sell the rumor, buy the fact” move could lift CAD temporarily.

The most important figure to look out for will be the third number in the table above – for quarter/quarter GDP growth annualized in the last three months of 2017. A higher than expected number would make an interest rate increase in Canada in the next few months a little more likely, while a lower than expected figure would reduce the chances of a rate rise.

However, the risks here are skewed. While better than forecast data would probably lift CAD, a weaker number might too as traders decide to take some of their profits from the recent sharp Canadian Dollar selloff illustrated here by a chart showing the rise in the US Dollar against it.

USDCAD PRICE CHART, HOURLY TIMEFRAME (FEBRUARY 1, 2018 – March 1, 2018)

Latest USDCAD hourly price chart

Chart by IG

For help to trade profitably check out the IG Client Sentiment data

CANADIAN INTEREST RATES IN FOCUS

At present, it seems likely that the Bank of Canada will leave interest rates on hold at its meeting on March 7 but the chances are roughly 50/50 that it will increase them at its following meeting on April 18, when it will publish its next Monetary Policy Report. While the prospect of an increase in rates should support the CAD, its weakness on a rallying USD, easier oil prices and concerns about the Nafta trade negotiations between the US, Canada and Mexico would likely resume once any correction is over.

In the meantime, note that from a technical perspective USDCAD faces strong resistance at 1.2917, only just above its current level, from the highs touched between late October and mid December last year. A move down to trendline support, currently at 1.2634 is therefore perfectly plausible before CAD weakens again.

USDCAD PRICE CHART, DAILY TIMEFRAME (October 17, 2017 – March 1, 2018)

Latest USDCAD daily price chart

Chart by IG

If you’d like to learn more about FX, listen in to our regular Trading Webinars

Meanwhile, here are some key messages when trading FX that hopefully you will find useful. Note that:

- Successful traders cut losses, and let profits run,

- Successful traders use leverage effectively, and

- Successful traders trade at the right time of day.

--- Written by Martin Essex, Analyst and Editor

Feel free to contact me via the comments section below, via email at martin.essex@ig.com or on Twitter @MartinSEssex

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES