Market Sentiment: Bullish
· The US dollar plunges against the Canadian counterpart
· High volatility is expected amid US GDP reports
· 1.1278 remains crucial resistance
As of this writing, the pair is being traded at 1.1094. On the upside, a hurdle can be seen near 1.1132, the high of the recent upside rally on the daily chart ahead of 1.1278, the high of March 2014.
The bias will however remain bullish as far as the 1.0886 (swing low of the recent downside move on the daily chart) remains intact.
The US Bureau of Economic Analysis is going to release the Gross Domestic Product (GDP) reports today in the New York session. According to the median projection of different economists, the US GDP remained 4.6% in the second quarter as compared to 4.2% in the same quarter of the year before. Similarly, the GDP remains 2.1% in the second quarter as compared to 1.3% in the quarter before, the forecast added. Generally speaking, higher GDP reading is considered positive for the economy thus better than expected actual readings will be seen as bullish for USD/CAD and vice versa.
Reuters/Michigan Consumer Sentiment
Today Reuters and University of Michigan are due to release the joint consumer sentiment report for the month of September. According to the average forecast of analysts, the consumer sentiment remained 84.7 points this month as compared to 82.5 points in the month before. The report is compiled on the basis of telephonic interviews and questionnaires every month, generally speaking higher consumer sentiment reading is considered positive for the economy thus a better than expected actual outcome will be seen as bullish for the pair.
Keeping in view the overall technical and fundamental outlook, selling the pair around current levels can be a good strategy if the price leaves valid bearish reversal signs such as shooting star or bearish engulfing candle.