Strong Data Spikes CAD


Canadian Dollar spiked up after the mix of data, where Canada GDP numbers were better than expected, and job growth soared, leaving the unemployment rate 0.4% lower at 5.9%. This was a strong report and combined with the nearly as expected 1.7% gain in Q3 and firm 0.2% gain in September GDP to lift the odds of a January rate hike from the BoC. The Q3 GDP print was close to expectations (we saw +1.6%) and only marginally below the BoC’s 1.8% estimate. However, the more likely move  is seen as in March, as they wait for more data to accumulate and allow for more time for the 50 bp in hikes this year to filter through the economy.

Dollar-Canada fell from 1.2895 to 1.2740,with WTI crude has regained some poise following choppy conditions surrounding the OPEC meeting on Thursday, and is currently trading near $58.40, levels which should limit USDCAD gains going forward.

EURCAD, fell by 180 pips down to 1.5152, which is the 38.2%  Fibonacci level from the uptrend since November 1st. The pair got back in an hour the gains seen the last 4 Days.  The momentum indicators weaken on this drift lower, with Daily Stochastic  turning lower, without crossing below 80 yet, and RSI returned lower to neutral levels. However the long term picture of the pair can be still consider as positive since , EURCAD has been seen making higher highs ans higher lows the last 3 months, while it is still movign above all 3 moving avergaes in a Daily timeframe.

However on the break of the 38.2% Fib level, and with a strong full Bearish candle seen in the 4-hour chart, the weakness is likely to continue, by retesting the next support at the 50.0% Fibonacci level at 1.5050. The crossing broke earlier the 20 and 50-period MA, with Bollinger Bands extending its lower pattern even lower. Intraday momentum indicators have turned around, with the RSI drifting at 3 weeks lows, i.e at  36. The Stochastic is at 23, while MACD lines remain positive but deviates from histogram which declines lower close to neutral.

The 1.5050 support is a key short term level to watch as this also marks a confluence of technical support with the 50% Fibonacci retracement of the 1.4730/15370 in November . A breakout would open 1.4970 which is the confluence  61.8% Fib. level and the 200-period MA . The consolidation range breakout would imply upside momentum up to 1.5230 resistance level.


Click here to access the HotForex Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE! The next webinar will start in:

Andria Pichidi

Market Analyst


Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.