Category: Canadian Dollar Forecast

USD/CAD Forecast Sep. 29-Oct. 3



The Canadian dollar dropped sharply last week, surrendering about 200 cents against the US dollar. USD/CAD closed the week at 1.1142, its lowest level since March. This week’s highlight is GDP. Here is an outlook on the major market-movers and an updated technical analysis for USD/CAD.

Canadian Core Retail Sales disappointed, posted its first decline since January. The US economy continued to post strong numbers, as New Home Sales beat the estimate and GDP sparkled with a 4.6% gain in Q2.

Updates:

USD/CAD daily chart with support and resistance lines on it. Click to enlarge:

USDCAD Forecast Sep22-26

  1. GDP: Tuesday, 12:30. GDP, which measures the change in economic output. is one of the most important indicators. The Canadian indicator is released every month, unlike the US and other major economies, which release GDP on a quarterly basis. The  indicator posted a gain of 0.3%, edging above the  estimate of 0.2%. The forecast for the upcoming release stands at 0.2%.
  2. Raw Materials Price Index: Tuesday, 12:30. RMPI has been alternating between gains and declines in recent releases. The index posted a sharp decline of 1.4%, its sharpest drop in 2014. Another weak reading is expected in the August release, with an estimate of -1.7%.
  3. Trade Balance: Friday, 12:30. Trade Balance is directly linked to currency demand, as foreigners need to buy Canadian dollars to purchase Canadian exports. The indicator has moved higher over the past three months and posted a surplus of 2.6 billion $C in August. This easily beat the estimate of 1.1 billion $C. The surplus is expected to drop to 1.5 billion $C in the upcoming reading.

* All times are GMT.

USD/CAD Technical Analysis

USD/CAD opened the week at 1.0947. The pair touched a low of 1.0926 and then climbed all the way to 1.1169, breaking above resistance at 1.1122 (discussed last week). The pair closed the week at 1.1142.

Live chart of USD/CAD:


Technical lines, from top to bottom:

With USD/CAD posting strong gains, we begin at higher levels:

1.1640 provided has provided resistance since June 2009. This marked the start of a US dollar rally which saw the pair drop close to the 0.94 line.

1.1494 was a key resistance line in November 2006.

1.1369 was breached in October 2008 as the US dollar posted sharp gains, climbing as high as the 1.21 level. This line has remained steady since July 2009.

1.1278 has provided resistance since March. This line marked the start of a rally by the Canadian dollar, which dropped below the 1.09 level.

1.1122 was breached and has switched to a support role. It is a weak line and could see action early in the week.

1.1054 continues to provide support. 1.0944 is the next line of support.

1.0815 has held firm since late August.

1.0737 marked a cap in mid-2010, before the US dollar tumbled and dropped all the way into 0.93 territory.

1.0621 marked a low point for the pair in early July. It is the final support line for now.

I am bullish on USD/CAD

The US dollar posted broad gains last week, and the Canadian dollar was flattened by the greenback juggernaut. US numbers have looked solid, and the markets are expecting a strong NFP late in the week. With the Fed set to wean the economy off QE in October, there will be more focus on the timing of an interest rate hike.

In our latest episode, we talk about Contango vs. Backwardation, Scottish reverberations and key US data:

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Further reading:

USD/CAD Forecast Sep. 22-26

USD/CAD Forecast Sep. 22-26

The Canadian dollar rebounded last week, gaining over 100 cents against the US dollar. USD/CAD closed the week at 1.0962. This week’s highlight is Core Retail Sales. Here is an outlook on the major market-movers and an updated technical analysis for USD/CAD. US  unemployment claims dropped sharply last week, and the Fed hinted that once rates are raised, subsequent hikes

USD/CAD Forecast Sep. 15-19

USD/CAD Forecast Sep. 15-19

The Canadian dollar had its worst week of 2014, as USD/CAD jumped about 200 points, closing close to the 1.11 level. This week’s major releases are Manufacturing Sales, Core CPI and Wholesale Sales. Here is an outlook on the major market-movers and an updated technical analysis for USD/CAD. Canadian housing data was a mix last week, as Building Permits shined, while Housing

USD/CAD Forecast Sep. 8-12

USD/CAD Forecast Sep. 8-12

USD/CAD showed some movement in both directions, but ended the week unchanged, closing at 1.0877. This week’s highlight is Building Permits. Here is an outlook on the major events and an updated technical analysis for USD/CAD. Canadian Employment Change and Ivey PMI tumbled in August, but the Canadian dollar managed to hold its own last week. In the US,

USD/CAD Forecast Aug. 25-29

USD/CAD Forecast Aug. 25-29

USD/CAD came close to the 1.10 line, but  then retracted and showed little change over the week. This week’s highlight is GDP. Here is an outlook on the major events and an updated technical analysis for USD/CAD. Canadian inflation remains in the doldrums, as CPI numbers declined in July. On a brighter note, retail sales were excellent. In the US, the economy continues to point

USD/CAD Forecast Aug. 18-22

USD/CAD Forecast Aug. 18-22

The Canadian dollar improved last week, as USD/CAD closed just below the 1.09 level. This week’s highlights are Wholesale Sales, Core CPI and Core Retail Sales. Here is an outlook on the major events and an updated technical analysis for USD/CAD. Canadian Housing Starts and Manufacturing Sales both beat their estimates, and the Canadian dollar took full advantage.

USD/CAD Forecast Aug. 11-15

USD/CAD Forecast Aug. 11-15

The Canadian dollar posted modest losses last week, as USD/CAD closed at 1.0971. Will the pair break above the 1.10 level? This week’s highlight is Manufacturing Sales. Here is an outlook on the major events and an updated technical analysis for USD/CAD. Canadian Building Permits and Ivey PMI were up sharply in July, but any chance of the

USD/CAD Forecast Aug. 4-8

USD/CAD Forecast Aug. 4-8

The Canadian dollar continued its losing ways last week.  The currency lost about a cent, as USD/CAD closed the week above the 1.09 line. There are five major releases this week, highlighted by Employment Change. Here is an outlook on the major events and an updated technical analysis for USD/CAD. Canadian inflation and GDP numbers were solid last week,

USD/CAD Forecast July 28-Aug. 1

USD/CAD Forecast July 28-Aug. 1

The Canadian dollar sagged on Friday, as USD/CAD pushed above the 1.08 level, closing at 1.0803. On the release front, it’s another quiet week, with only two events. Here is an outlook on the major events and an updated technical analysis for USD/CAD. Canadian retail sales were a mixed bag and had little effect on the pair. In

USD/CAD Forecast July 21-25

USD/CAD Forecast July 21-25

USD/CAD was unchanged at the end of the week, closing at 1.0732. The upcoming week is very quiet, with just two events. Here is an outlook on the major events and an updated technical analysis for USD/CAD. As expected, the BOC left interest rates at 1.0%. Inflation numbers matched expectations, while Manufacturing Sales and Wholesale Sales both posted strong