The U.S. Dollar (USD) inched higher against the Canadian Dollar (CAD) on Wednesday (August 25, 202l), increasing the price of the USDCAD pair to more than 1.2600, ahead of the release of the U.S. Gross Domestic Product (GDP) news.
Technical Analysis
As of this writing, the USDCAD strengthens around 1.2614. Should the price continue to increase, the pair might face some resistance near the listed price levels.
Short-Term Resistance
1.2657 – the high of August 24, 2021
1.2700 – the psychological number
1.2726 – the key horizontal resistance
Daily Chart Image Source – MetaTrader4
On the downside, the USDCAD pair might find some support near the given price levels.
Short-Term Support
1.2541 – the lower trendline arm
1.2476 – the key horizontal support
1.2400 – the psychological number
U.S Gross Domestic Product (GDP) News
The U.S. Bureau of Economic Analysis anticipates releasing stats for the U.S. Gross Domestic Product news tomorrow (August 26, 2021). According to economists’ consensus, the U.S. GDP news registered a reading of 6.7%, in the second quarter, as compared to the reading of 6.5%, in the quarter before.
The U.S. GDP news reflects the worth of goods and services produced within the country over a given time. Being a significant economic indicator, it also helps economists estimate the pace at which the country’s economy grows or deteriorates. Generally speaking, a high reading signals a growing economy and strengthens the U.S. Dollar suggesting a bullish trend for the USDCAD pair and vice versa.
Conclusion
Given the macroeconomic outlook of the USDCAD pair, it may be a better option in the short term if the pair was bought at around 1.2575. Due to the volatile nature of the market, however, prices may change and lead to different outcomes.