Real GDP in Canada grew 0.5% in January, rebounding from a 0.5% decline in December. Before that, there were 5 consecutive months of growth. In January, Manufacturing activity was the main contributing factor to the growth, while “agriculture and forestry” was the main drag. (Source: Statcan) The persistent growth since 2009 is a welcoming trend for the Canadian economy, and also a factor that should allow the BoC to end its loose monetary policy sooner. This should be CAD-positive, and the market is so far reacting that way. USD/CAD Falls: USD/CAD for example returned to last week’s low of 1.10. This price action threatens to extend an already sharp decline from the March and 2014 high of 1.1277. A break below 1.10 opens up 1.0955 and 1.0910 lows in the short-term. A break below 1.0910 would open a bearish market in the medium term, reversing the prevailing bullish outlook that has been developing since Sept. 2012. (USD/CAD 4H 3/31) Bullish scenario: If the market holds 1.10 and pushes USD/CAD above the 1.1077 pivot, we can look for a near-term bullish outlook toward the 1.1150 pivot, or 1.1171, 61.8% retracement. This scenario would also maintain the prevailing bullish outlook, the one that has been developing since Sept. 2012. CAD/JPY Extends: Another theme today has been risk appetite, and therefore a weak JPY across the board. CAD/JPY therefore has double the fuel to extend its already bullish swing. When you look at the 4H chart, you see a market in consolidation since the beginning of February. This consolidation followed a sharp bearish swing that started on Jan. 1 2014 from 99.15 to 90.65 by Feb. 3. (CAD/JPY 4H chart 3/31) Price is attacking the consolidation resistance area. A break above 94.10 would essentially complete a double bottom, and suggest an attempt to revisit the 2014 high around 99.15. With the 4H chart showing overbought condition, we should anticipate some near-term resistance around 94, or some pullback if 94.10 is broken by the current swing. Fan Yang, CMT is a forex trader, analyst, educator and Chief Technical Strategist for FXTimes. Information and opinions contained in this report are for educational purposes only and do not constitute an investment advice. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness. FXTimes will not accept liability for any loss of profit or damage which may arise directly, indirectly or consequently from use of or reliance on the trading set-ups or any accompanying chart analysis.