- USD/CAD suffers its first daily loss in three days, but momentum has waned recently.
- A two-week-old triangle limits Loonie moves at a yearly low.
- Additional trading criteria include the month-long horizontal support and the 1.3250 resistance confluence.
- The US Q2 GDP is being tracked after the Fed failed to impress pair buyers.
USD/CAD remains on the back foot around the intraday low, despite lacking downside momentum heading into Thursday’s European session.
Academia Sinica, Taiwan's top research institution, on Thursday trimmed its forecast for gross domestic product growth in 2023 to 1.56 percent, from 2.41 percent forecast in December last year. #GDPhttps://t.co/Vnb6wqSmEU
— Focus Taiwan (CNA English News) (@Focus_Taiwan) July 27, 2023
In doing so, the Loonie pair prints the first daily loss in three as markets await the first readings of the US Gross Domestic Product (GDP) Annualized for the second quarter (Q2), expected to ease to 1.8% from 2.0%. Also important to watch is the US Durable Goods Orders for June, likely easing to 1.0% from 1.8% prior (revised), as well as the monetary policy announcements from the European Central Bank (ECB).
That said, the Loonie pair remains within a fortnight-old triangle formation, currently between 1.3150 and 1.3225, following its corrective bounce off the lowest levels since September 2022 marked during mid-July.
The US will spend $7.2 trillion on healthcare by 2031, or 19.6% of gross domestic product (GDP), according to annual national expenditure projections released by the Centers for Medicare and Medicaid Services (CMS) on June 14.
In comparison, the US spent about $4.4 trillion on…
— Rachid Akiki, MD, MBA (@rachidakiki) July 27, 2023
That said, the Loonie pair remains within a fortnight-old triangle formation, currently between 1.3150 and 1.3225, following its corrective bounce off the lowest levels since September 2022 marked during mid-July.
It’s worth noting that the RSI (14) conditions suggest a continuation of a slower grind toward the south.
However, a one-month-old horizontal support zone near 1.3120-15 and the 1.3100 round figure may provide additional checks to the USD/CAD bears before directing them to the tops marked during May and June of 2022, close to 1.3080-75.
The European Central Bank (ECB), the central monetary authority of the Euro currency bloc, will likely raise the benchmark EU interest rate Thursday #ECB #InterestRate #economy https://t.co/pQNsaCR79u
— Al Bawaba News (@AlBawabaEnglish) July 27, 2023
On the flip side, a convergence of the 200-Exponential Moving Average (EMA) and a descending resistance line from May 31, close to 1.3250 at the latest, appears a tough nut to crack for the USD/CAD bulls, apart from the stated triangle’s top line surrounding 1.3225.
In a case where the Loonie pair manages to remain firmer past 1.3225, the odds of witnessing a rally toward the monthly high of around 1.3390 can’t be ruled out.