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Canada GDP Rebounded in January; USD/CAD dips

Real GDP in Canada grew 0.5% in January, following a 0.5% decline in December.

Manufacturing activity was the main contributor to the growth in January, while agriculture and forestry was the main drag.

Source: Statcan

CAD gained after the release. USD/CAD is retesting last week's low around 1.10, and threatens to extend an already sharp decline from March and 2014 high of 1.1277.

If 1.10 breaks, USD/CAD would be poised to test the next lows at 1.0955, then 1.0910 in the short-term.

(USD/CAD 4H Chart 3/31)

Bullish scenario:
If the market holds 1.10, or lets a brief break but pushes USD/CAD above the 1.1077 pivot, then we should shift back to the bullish outlook for USD/CAD, at least one in the short-term with 1.1170, 61.8% retracement as a conservative target.