USD Managed To Consolidate Gains from Better than GDP Readings

USDCAD pair saw stable uptrend based consolidation during early hours of today’s trading session. The pair was on steep Bull Run last week over influences gained from positive US Treasury bond yields and positive economic readings. While bullish triggers lost significant amount of market influence during later half the week, a better than expected preliminary GDP readings helped US dollar consolidate on upper levels of gains from last week before proceeding on another bull run.

USDCAD Continues Consolidation

This consolidation of US dollar can also be viewed as Canadian Dollar managing to weather the bullish influence from US on a positive note not giving too much leeway for US dollar to gain further. Poloz and Wilkins have maintained the same cautious lines about inflation and monetary policy so far. Oil prices stabilized and NAFTA talks saw progress which can be viewed as possible factors that could help Canadian dollar gain some bullish influence later this week.

Traders are on sharp lookout for GDP readings to be released tomorrow and Bank of Canada Governor Poloz’s speech on Wednesday where he is expected to come in front of audience for questioning and is expected to comment on latest GDP figures and trade negotiations. These two are expected to be two major factors that could possibly help CAD gain upper hand this week. Also to lookout for is Ivey Purchasing Managers’ Index to be released on Friday which could help gauge how manufacturing industry is faring in Canada.

When looking at how USD could proceed further, US dollar could continue to move uptrend this week if the spread between U.S. Government Bond yields and Canadian Government Bond yields continues to widen. Expected support and resistance for the pair in trading session to come this week are at 1.2767/1.2685 and 1.2900/1.3000 respectively.