However, the Bank cautioned that they believe that GDP growth rate is a temporary blip and they forecast growth for 2016 to be 1.7%, an increase from their previous estimate of 1.4%. The Bank of Canada also mentioned that the Canadian economy will be undergoing a lengthy period of complex adjustment to lower oil prices,” according to OptionsExpress.

Canada’s oil production could either lift or weigh on the economy, depending on the energy market. Additionally, as we hear more about droughts and dry weather conditions, Canada’s freshwater reserves, which account for 20% of the world’s freshwater, could come into play.

Turning to the 3 month continuation chart, we see several bullish signs for the Canadian Dollar. The 20 day Simple Moving Average (SMA) is providing a nice support level and the 20 day SMA is also above the 50 day SMA. The Canadian Dollar has also been achieving a series of higher highs and higher lows since the bull run began in mid-January. 14 day Relative Strength Index is a moderately bullish 65.37,” adds OptionsExpress.

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