Key Highlights · US dollar continued to gain strength against the Canadian dollar, and looks set for more gains moving ahead. · Canadian Gross Domestic Product will be released by the Statistics Canada later today, which is expected to increase by 2% in the fourth quarter of 2014, compared to Q4 2013. · In Australia, the RBA Interest Rate Decision was announced by the Reserve Bank of Australia in which surprisingly the central bank made no changes in the interest rates. · USD/CAD has a major support around 1.2500 and resistance ahead at 1.2560. Canadian GDP Today during the NY session, the Canadian Gross Domestic Product will be released by the Statistics Canada. The forecast is slated for a gain of 2% in the Canadian GDP in the fourth quarter of 2014, compared to the same quarter a year ago. The last increase was of 2.8%. In terms of the monthly change, the forecast is lined up for a rise of 0.2%, compared to the previous decline of 0.2%. There are some other releases lined up as well, including the industrial production and raw material price. It would be interesting to see how the outcome unfolds and affects the Canadian dollar pairs in the short term. Technical Analysis The USD/CAD pair recently climbed towards the 1.2550-60 resistance area where the US dollar sellers successfully defended the upside. There was a confluence of resistances around the mentioned area. A channel resistance trend line and 61.8% fib retracement level of the last drop from the 1.2662 high to 1.2386 low is coinciding around the same area.
USD/CAD 4 Hourly Chart
The USD/CAD pair is currently correcting lower, and heading towards the channel support area. There is a monster support around the 1.2500 area, as the channel trend line is coinciding with the 100 simple moving average on the 4 hour chart.