CAD Steady as Ceasefire, GDP Data Loom

A miss, however, would cement expectations for another BoC cut at the next meeting. The market is already pricing a high probability of easing. The GDP figure will either confirm that view or force a re-pricing. Short-term USDCAD positioning is stretched, which means the pair could whip hard on the release regardless of the oil backdrop. The chain of impact here is clean: weaker GDP → more BoC cuts → wider rate differential → higher USDCAD. Stronger GDP does the reverse and could push the pair back toward its 200-day moving average.

What to Watch Next

The next concrete catalyst is the Canada GDP print. A beat could push USDCAD below the recent support zone near 1.3650. A miss breaks through resistance at 1.3800. Meanwhile, any escalation or de-escalation in the US-Iran talks will hit the oil leg first and then feed into the loonie. Traders should watch the WTI weekly close: a sustained break below $85 would strengthen the bearish case for CAD. If oil holds above $88, the ceasefire premium may already be fully priced.

For traders positioning ahead of the data, the USDCAD risk is asymmetric. An upside GDP surprise is less discounted than a downside miss, given the market’s lingering growth pessimism. That asymmetry makes a long-CAD trade more compelling heading into the release. The forex correlation matrix shows CAD is currently most sensitive to oil and to the two-year rate spread, reinforcing the dual focus.

Next Decision Point

The Canada GDP release this week is the clearing event. If the number is firm, expect USDCAD to drift lower into month-end. If it is soft, the pair breaks higher and oil loses its role as the dominant driver for the session. The following BoC meeting will then anchor the next leg.