The recent strength shown by the Canadian dollar against the Greenback has proven short-lived. Sub-$70 WTI crude and building oil supplies have currency players reevaluating the Loonie. Following the Wednesday Bank of Canada (BoC) rate hike, many traders shorted the USD/CAD. Now, the rebound is on and rates have rallied above a key technical area.

USD/CAD Technicals

In a live market update from yesterday, I outlined several key areas of downside support for the USD/CAD. After the intraday bearish GAP following the BoC Interest Rate Decision, buyers stepped in at the daily Bollinger MP and drove rates north.

The 1.3050 level is a key indicator in evaluating the current market state of the USD/CAD. While rates fell dramatically in the aftermath of the BoC, they quickly returned above the 38% Current Wave Retracement (1.3050). In my view, this reinforces a bullish bias and preserves the integrity of the intermediate-term uptrend.

Overview: The Friday forex session brings several primary economic releases that will greatly impact this pair. U.S. Core Personal Consumption and GDP for the third quarter are due out during the U.S. pre-market hours. These two numbers are huge market movers and will have the attention of forex players around the world.

Both items are projected to come in below their previous release, led by GDP (Q3) falling from 3.3% from 4.2%. This is a lowball estimate ― do not be surprised if the report comes in above the 3.3% figure.

Tomorrow will be an active forex trading day ahead of the weekly closing bell. Depending upon the data in these two reports, we may see a rally or sell-off in the USD/CAD. One is well advised to respect the upside in this market as long as pricing remains above 1.3050.