Canadian GDP overview
Friday’s economic docket highlights the release of monthly Canadian GDP growth figures for March, scheduled to be published at 12:30 GMT. Statistics Canada will also release the annualized quarterly growth rate, making this event more significant than the ones including only monthly data. Consensus estimates suggest that the economy contracted sharply by 9.0% during the reported month and tumbled 10% in the first quarter of 2020, primarily on the back of the coronavirus-induced lockdown.
How could it affect USD/CAD?
Given that the recent fall in the USD/CAD pair has been sponsored by weaker US and a strong recovery in crude oil prices, the data is unlikely to be a major game-changer. However, a big divergence from the expected figures, especially on the downside, might be enough to prompt some near-term short-covering move. The pair has been consolidating near 2-1/2-month lows and so far, has managed to hold above 100-day SMA support near the 1.3700 mark.
Bearish traders are likely to wait for a sustained breakthrough the mentioned level before positioning for any further near-term appreciating move. Meanwhile, any meaningful recovery beyond the 1.3800 round-figure mark is likely to confront a stiff resistance near an important horizontal resistance breakpoint near the 1.3850-60 region.
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About the Canadian GDP
The Gross Domestic Product released by Statistics Canada is a measure of the total value of all goods and services produced by Canada. The GDP is considered a broad measure of Canadian economic activity and health. Generally speaking, a rising trend has a positive effect on the CAD, while a falling trend is seen as negative (or bearish) for the CAD.