USD/CAD

Future Expectations Run High: Even as crude oil remained relatively down on the day, Canadian dollar interest skyrocketed as bulls pushed the price action higher through formidable resistance.  Impressed by the overall bullish sentiment, expectations of higher interest rates, and higher growth revisions by the government, institutional buyers drove the price of the loonie to hit 13 ½ year highs on the session breaking through considerable bottomside floors at 1.1650.

Gross Domestic Product Figures: Overall output figures were released on the day with mining and energy sectors pacing considerable growth in the world's eighth largest economy.  However, the figure finished below expectations at 0.2 percent growth as manufacturers and wholesale trade figures dragged on the data.  Nonetheless, future growth expectations were revised higher for the next quarter, thus prompting further speculation that interest rates are on the up-and-up.

Technically Speaking: After touching the 1.1585 intrasession low, a retracement looks probable with the most obvious 1.1650, previously support level, serving as the first topside test.  Additionally confirming the retracement is the golden cross forming in the stochastic oscillator as it begins to peak above the 20 reference. Once the aforementioned resistance level is broken, a test of the 23.6 percent fib at 1.1712 would be probable prior to further downside direction being established.

EUR/CAD

Disappointing Euro Data Weighs Heavily: Given optimism in the loonie currency, traders pared back earlier gains in the major, reflected through the EURCAD cross.  Prompting the aforementioned gains earlier on, flash estimates of euro zone CPI were to the upside, rising 2.5 percent in the month.  Mostly attributed to higher oil prices, the figures were in line with earlier comments by policy officials that interest rates would have to rise in conjunction with the overall economic picture.  Evidence of this sparked speculation driving the single currency higher.  However, later data added to distaste as German retail sales actually dipped 0.8 percent rather than rising 0.4 percent as expected.  The third consecutive dip, consumers remain restrained on higher oil prices acting as an effective tax on disposable income.  Additionally, industrial and consumer confidence remained stagnant.

Technically Speaking: Similar to the USDCAD currency pair, the cross looks to retrace slightly after touching the intrasession low of 1.3940.  However, the move may be slightly less confident as the stochastic reading remains in overextended territory with no nascent formation of a golden cross.  Nonetheless, any rebounds higher would see a test of the first ceiling at 1.4050 with a more formidable test at the confluence of the 23.6 percent fib level from the monthly move and support level at 1.4190/95.

CAD/JPY

Japanese Data Off Par: Cautious optimism was not tempting enough for traders to bid the Yen in opposition to the frenzied pace of the loonie ounce again.  The fundamental picture for the day was deluged with multiple indicators that provided a overall tepid picture.  Offering up the only truly positive sentiment for the day was the unemployment rate's fall to 4.3 percent for August, potentially increasing the income potential for the country that has recently been anemic with consumer spending.  Providing the true substance for the day were worker's household spending, which came in below expectations, while national consumer prices dropped another 0.1 percent, despite crude prices hovering around highs.  Finishing off any retention of hope for the day came with the highly anticipated industrial production number, posting in positive territory but well below what was expected.

Technically Speaking: The pair moved full steam ahead into the close of the day suggesting a follow through for the open of next week, baring any surprising data.  While no immediate solid level exists northward, the psychologically important 100 will contain rampant exuberance.  If the pair moves back in the yen's favor on the open of next week, the 38.2% fib will be the first true test of near support.

Richard Lee is a Currency Strategist at FXCM.