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CAD quiet ahead of Canadian GDP. Broader USD mixed to weaker. Long weekend ahead.

CXI March 29th, 2018


  • USDCAD: Dollar/CAD inched higher yesterday, but it was a choppy mess of a trading session with the 1.2850 option expiry and some crude oil volatility weighing early, and some broad USDJPY led, USD buying helping later.  The 1.2870s survived three downward tests, but when all was said and done, USDCAD couldn’t breach key near term resistance in the 1.2920s, and so we had a rather lackluster NY close.  This closing pattern, along with a relatively quiet overnight session for the broader USD, has left USDCAD directionless going into the January Canadian GDP numbers, which will be coming out 8:30amET.  Markets are expecting +2.9% YoY vs. +3.3% in December.  A weaker than expected number will likely see USDCAD firmly break above the 1.2920s, and that would open the door for a rise to the 1.2990s.  A better than expected number will likely see the market attack the 1.2870s again, and if that level fails to hold, traders will eye the next support level in the 1.2820-30 area.  EURCAD is looking heavy at this hour (losing the 1.59 level), which is bit concerning.  There are a couple US data points to watch, but again 2nd tier releases (US Core PCE at 8:30amET and Chicago PMI at 8:45amET).  We think the Canadian GDP print will set the tone early today, and then traders will decide how they want to be positioned ahead of the long weekend.  Positioning squaring and thinning liquidity later today could make for some unexplainable moves, so chart levels will be important to watch.

Tune in @EBCTradeDesk for more real-time market coverage.


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Erik Bregar

Erik Bregar - Director, FX Trading

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