USD/CAD surges to five week high on dismal Canadian GDP

The USD/CAD pair caught fresh bids and built on to its momentum above 1.3500 handle to touch the highest level since Nov. 18 after disappointing Canadian GDP print. 

Currently trading around five-week high level of 1.3540, a big miss from monthly Canadian GDP print for October, released just a while ago, added on to Thursday's dismal CPI reading and was seen weighing heavily on the Canadian Dollar. In fact, the monthly GDP print came-in to show a contraction of 0.3%, falling below estimates pointing to a flat reading and worse than 0.3% growth recorded in the previous month. 

Moreover, a weaker sentiment surrounding oil markets, with WTI crude oil trading with losses in excess of 1%, is further driving flows away from the commodity-linked currency - Loonie. 

Next on tap would be US economic data that includes - new home sales data and revised UoM consumer sentiment index.

Technical levels to watch

A follow through buying interest above mid-1.3400s might continue to boost the pair further towards multi-month highs resistance near 1.3590 area (touched in Nov.) before the pair eventually breaks through 1.3600 handle and head towards testing its next major hurdle near 1.3650-55 horizontal zone.

On the downside, 1.3515-10 area, closely followed by 1.3500 psychological mark, now becomes immediate support to defend. Failure to hold this immediate support is likely to trigger a profit-taking slide below 1.3480 horizontal support, towards its next support near 1.3420 level.