USD/CAD bulls challenge 1.29 handle post US GDP

• US forth quarter GDP comes in better than expected at 2.9%.
• The USD/CAD bulls are currently challenging the 1.29 handle.

The USD/CAD is trading at around 1.2904 up 0.15% on Wednesday as the annualized US Gross Domestic Product (GDP) growth rate in the final quarter of 2017 came in at 2.9% while analysts were forecasting 2.7%. Core Personal Expenditure (PCE) price index, preferred gauge of inflation for the Federal Reserve Bank,  rose 1.9% in forth quarter of 2017, in line with expectations. 

The US Dollar Index has been showing some positive momentum since the bulls found a floor on Tuesday at the 89 handle and bulls are now targetting the 90 mark as the US Dollar is getting a boost from the positive US macroeconomic data just released.

Meanwhile, Saudi Arabia and Russia are working on a 10 to 20-year deal. "We are working to shift from a year-to-year agreement to a 10-20 year agreement…We have an agreement on the big picture but not yet on the details”, said Saudi Crown Prince Mohammed bin Salman. Which could potentially boost oil and the commodity-linked currency CAD. 

USD/CAD daily chart

The USD/CAD is trading well above its 50, 100 and 200-period simple moving averages and is forming a base in the 1.28-1.29 range.  

USD/CAD 4-hour chart

The USD/CAD has found support at the 200-period simple moving average and bulls objective’s is to break above the 1.29 handle resistance. If their breakout is successful the next scaling point is seen at 1.2950 last swing high and home of the 50 and 100-period simple moving averages. On the flip side, support is seen at 1.2850 supply/demand zone and at the 1.29 figure.