The USDCAD currency pair updated the annual high during yesterday's trading session. This was against the background of a sharp decline in the Canadian currency.
On Tuesday, the Fed released the Gross Domestic Product (GDP) report for August, which showed that the Canadian economy remained unchanged at 0%, with preliminary estimates suggesting a contraction in the third quarter. This could indicate the possible start of a technical recession in the Canadian economy.
The report cited higher interest rates, inflation, wildfires and drought weighing on the economy.
Canada's GDP totaled $2.082 trillion in August, slightly up from the previous month's figure of just over $2.081 trillion.
8 out of 20 industries showed growth in August, with an increase in services sectors offset by goods-producing sectors.
Among the industries that registered growth were wholesale trade, mineral extraction (including oil and gas production), and quarry development.
Today's market focus is on the outcome of the Fed's two-day meeting. The monthly U.S. employment report will be released on Friday.
U.S. labor costs rose steadily in the third quarter driven by strong wage hikes. At the same time, housing inflation accelerated in August. The U.S. Consumer Confidence Index declined for the third consecutive month, according to data for October released on Tuesday.
These macroeconomic indicators provide important information about the current state of the U.S. economy and help Fed members determine the necessary actions to keep the economy stable and resilient.
The USDCAD pair is forming a new uptrend on the H4 timeframe.
In terms of wave analysis, the price is currently forming the third ascending wave. Breaking through the top of the first wave at 1.3785 has already taken place. The upward movement may intensify in the near term.
Signal:
The short-term outlook for the USDCAD pair suggests buying.
The target is at the level of 1.4170.
Part of the profit should be taken near 1.4025.
A Stop-loss could be set at 1.3685.
The bullish trend has a short-term character, so the trade volume should not be more than 2% of your balance.
This content is for informational purposes only and is not intended to be investing advice.
