USDCAD: Seeking buy setups above 1.089

• Australian building approvals contracted for a 4th time over the past 5 month to suggest a peak has been seen in the housing sector. The A$ was already fragile after strong US GDP data last night, with today;s data keepin it near 8-week lows. View today's post for details

• Japan average cash earning y/y fall short at 0.4% vs 0.7% expected.

• China Growth: CitiGroup upgrade their China growth forecast to 7.5% from 7.3% for 2014

UP NEXT:

• European data takes the helm tonight with CPI flash estimates expected to be steady at 0.5%. With yesterday's bullish hammer on higher volume forming there is a technical argument for a bullish retracement. If we come in at 0.5% or more then we should see EURUSD retreat from the lows towards 1.3445 resistance.

• Canadian GDP could provide further fuel to the bullish USDCAD if it falls short of 0.3% tonight. GDP has been expanding (slowly) for the past 4-month with the rate of acceleration declining. A positive number could see some profit taking and retracement on USDCAD but the trend remains increasingly bullish.

• US jobless data may add a little volatility for those who cannot wait for tomorrow's NFP, but really the markets await tomorrow's employment data. If we fall short it may spur some profit taking from USD bulls.

TECHNICAL ANALYSIS:

USDCAD: Seeking buy setups above 1.089

The Daily pivot is an obvious buy zone as this coincides with several other technical levels between 1.089-90. With US and CAD data out tonight (and I am favouring disappointing GDP from Canada) then I see no reason to buck the clearly bullish trend just yet.

​That said, poor data from US and good GDP data from Canada should see a quick reversal but I would only want to consider short positions below 1.089 (and not outstay my welcome).