During the US session ahead, there are many economic figures will be released from the US and Canada, which set to have a notable impact on the markets. However, we will concentrate on the Canadian figures today, especially that the Canadian Dollar today is the second strongest currency after the Japanese Yen.

Definitions

Monthly GDP: The Gross Domestic Product released by the Statistics Canada is a measure of the total value of all goods and services produced by Canada. The GDP is considered as a broad measure of Canadian economic activity and health

Raw Materials Price Index: Change in the price of raw materials purchased by manufacturers. It’s a leading indicator of consumer inflation – when manufacturers pay more for goods the higher costs are usually passed on to the consumer.

Industrial Production Price Index: Change in the price of goods sold by manufacturers; Only includes goods produced domestically.

Why Monthly GDP

Canada is unique in that they release fresh GDP data on a monthly basis. A quarterly GDP figure is also released, however, it’s merely a summation of the monthly data, which keeps investors up to date on a monthly bases regarding the economic growth and not only on Quarterly basis.

Market Expectations

Today’s expectations are mixed; the monthly economic growth is set to slow down in July to 0.3% instead of 0.6% growth in June. However, this would be the second monthly growth in a row, after shrinking by more than 0.6% in May of this year. Therefore, it will be more important than the rest of the data, including the RMPI and the IPPI.

Market Impact

Generally speaking, a positive reading would be positive for the Canadian Dollar across the board, while a weaker reading would decrease the positive sentiment. This week, the Canadian Dollar gained on the back of the notable rise in Crude Oil prices after the surprise deal between OPEC members to cut and limit their oil production.

USDCAD Technical Outlook

Looking at the 4H chart, the USDCAD is trading well below its 1.3240 solid resistance area since July of this year, with no clear above that resistance so far, which should be watched carefully. The pair dropped this week right from that resistance all the way back to 1.3050’s support area, and rebounds today to test its 61.8% Fibo retracement, which seen as the key for today’s trading. Since the 1.3240 is solid resistance since Mid-July and the 61.8% remain intact, a bearish outlook is more likely, especially that Crude Oil is still rising, while the estimates for today’s figures are somewhat positive.

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Levels To Watch