Canadian GDP data for the month of October is expected to show a 0.1% expansion
USD/CAD is the currency pair to watch today as both economic data and the OPEC meeting offer some strong volatility. So far, oil prices have been ranging with no clear outcome from the OPEC informal announcements but anything could happen as no-deal on the OPEC agreement could mean further weakness in oil prices and thus putting pressure on the Canadian dollar.
Canada GDP figures will be coming out today
The markets expect to see a 0.1% increase in the gross domestic product on a month over month basis in September while the quarterly GDP is projected to have expanded solidly by 3.4% for the quarter ending October 2016. A match on the estimates on the actual data will be bullish as the GDP fell 1.6% in the second quarter.
The Canadian dollar opened Monday on a bearish note falling off the 1.3500 – 1.3495 resistance level. While we initially expected a move back to this level, prices have remained stuck close to the 1.3400 support.
However, there is still chance that prices could rise back to 1.3500 to establish resistance ahead of what could be a medium term downtrend that will see USDCAD retest the previous support region of 1.3200 - 1.3145. USD/CAD will be seeing the GDP data, alongside the outcome of the OPEC meeting.
And if this isn’t enough, U.S. economic data is also busy today with the ADP payrolls and Core PCE figures coming out later.
How to trade binary
USDCAD will be ideally seeing another retest to 1.3500 – 1.3495 where PUT options can be purchased as price will very likely push lower in the coming day or two. The OPEC meeting is of course the uncertain event today that could swing prices in either direction for USDCAD.
Still, the factors supporting a decline to 1.3200 outweigh the upside risks. Look for a reversal near 1.3500 resistance for PUT options with 21:00 GMT expiry time.
Target price: 1.3500
Expiry: 21:00 GMT