38.7% Canadian GDP drop

On Friday, Government data showed that Canada's second-quarter annualized GDP shrank 38.7% on quarter, slightly better than -39.4% expected. Later today, July PPI will be expected at -2.3% on month and Building Permits at +4.0%.

From a technical point of view, on a daily chart, USD/CAD remains capped by a declining trend line in place since March and by its declining 50-day moving average (in blue). The daily RSI stands below its neutrality area. Readers may therefore consider the potential for further weakness below horizontal resistance at 1.3320. The nearest support would be set at yearly bottom at 1.2950 and a second one would be set at set at October 2018 low at 1.2790 in extension.

Source: TradingView, GAIN Capital


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