Breaking Down the USD/CAD Bullish Breakout Amid Canadian GDP Release

This morning, ahead of the Canadian GDP data, expected to show a growth of 0.3%, the USD/CAD pair displayed bullish momentum during the early European session. Traders should closely monitor this economic indicator as it can significantly sway the currency’s movement.

From a technical standpoint, the USD/CAD has shown encouraging signs. The pair found strong support at the 1.362 level, a zone marked with yellow on our chart. Historically, this level acted as a resistance, and following a recent breakout, it has transitioned into a support role.

The price notably bounced off this yellow-marked support and subsequently broke through a red downtrend line. This breakout is a bullish signal, suggesting that buying opportunities may arise. Currently, our first target is the resistance level at 1.373, marked in orange. The probability of reaching this target appears high given the current price trajectory.

Upon reaching the 1.373 resistance, the market reaction could vary. We could either encounter a bearish correction or witness a continuation of the bullish breakout. The key will be to observe how the pair reacts at this resistance level to gauge the market's direction.

For now, the technical indicators suggest a buy signal for the USD/CAD pair, fueled by both the breakout from the downtrend and the solid support found at the 1.362 level. Traders should remain vigilant, however, as the upcoming Canadian GDP report could impact market sentiment and potentially alter the technical outlook.