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Loonie traders have a lot going for them this week with Canada’s data releases and a bunch of brewing market themes.

Which catalysts should you keep closer tabs on?

I’ve compiled a list for ya:

Quarterly GDP (Dec 1, 1:30 pm GMT)

  • Canada’s GDP shrank by 11.5% and officially entered a recession in Q2 2020
  • The economy is expected to have jumped by 10.0% in Q3 2020 as lockdown restrictions eased
  • Annualized growth is expected to recover from -38.7% to +46.0%

Labor market numbers (Dec 4, 1:30 pm GMT)

  • Canada added a net of 83,600 jobs in October with most of the additions made in full-time jobs
  • The unemployment rate dipped from 9.0% to 8.9% for the month and marked its fifth consecutive monthly decline
  • CAD got an extra boost from the positive jobs numbers though it gave up some of its gains by the end of the day
  • Analysts see the economy adding a net of 60,000 jobs in November
  • The unemployment rate may have improved further to 8.8% for the month

Other lower-tier releases

  • Current account deficit (Nov 30, 1:30 pm GMT) could have widened in Q3 2020
  • Markit’s manufacturing PMI (Dec 2, 2:30 pm GMT) is seen dipping from 55.5 to 55.3
  • Trade deficit (Dec 4, 1:30 pm GMT) to widen to 3.5B CAD as imports outpace exports in October

OPEC meetings

  • On Monday and Tuesday, the Organization of the Petroleum Exporting Countries (OPEC) and its other oil-producing friends will decide whether they will go through with the planned output increase for three to six months starting January
  • OPEC+ members have to balance trends of the pandemic hitting fuel demand and their optimism over the vaccines available by mid-2021 when the leaders next meet
  • Word around is that Russia and a few others want to keep the output cut in place, while producers like UAE and Kazakhstan want to go ahead with production increase as scheduled

Overall CAD demand

  • Rising coronavirus cases in the U.S. is limiting Canada’s recovery prospects
  • Unless this week’s data releases surprise to the upside or downside, CAD will most likely dance to the tune of risk sentiment

Technical snapshot

  • RSI is flagging CAD’s “oversold” conditions against NZD
  • The Loonie may soon hit “overbought” status against the dollar
  • CAD/CHF, CAD/JPY EUR/CAD, and GBP/CAD are mostly in neutral territory
CAD Forex Pairs RSI from MarketMilk
CAD Forex Pairs RSI from MarketMilk
  • SMAs show CAD’s short and long-term bearish trends against AUD and NZD
  • The Loonie is seeing short and long-term bullish trends against the dollar and yen
  • We may soon see retracement or reversal opportunities on CAD/CHF and GBP/CAD
CAD Forex Pairs SMAs from MarketMilk
CAD Forex Pairs SMAs from MarketMilk
  • CAD/JPY, GBP/CAD, CAD/CHF, and USD/CAD were the four most volatile major Loonie pairs in the last month
CAD Forex Pairs Volatility from MarketMilk
CAD Forex Pairs Volatility from MarketMilk

Missed last week’s price action? Read CAD’s price recap for Nov. 23 – 27!