Category: Canadian Dollar Forecast

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 in the right direction. There was good news on the employment, manufacturing and housing fronts last week, pointing to balanced growth in the economy. There was a lot of hype leading up to Janet Yellen’s speech at Jackson Hole on Friday, but the Fed chair focused on the US employment picture and didn’t provide any clues about the timing of an interest rate.

Updates:

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

USDCAD Forecast AUG25-29

  1. Corporate Profits: Tuesday, 12:30. The week starts off with this minor release, which tends to show some volatility. The indicator is released every quarter, and jumped 7.4% in Q1, its strongest gain since 2011. The markets will be hoping for another strong outing in Q2.
  2. Current Account: Thursday, 12:30. Current Account is directly related to currency demand, since foreigners must purchase Canadian dollars in order to purchase Canadian goods and services. The deficit narrowed to $12.4 billion in Q1, matching the estimate. The markets are expecting more good news in Q2, with the estimate standing at -$11.4 billion. Will the indicator follow suit with a strong reading?
  3. GDP: Friday, 12:30. GDP is the key event of the week and is one of the most important economic indicators on the calendar. Canadian GDP is released every month, unlike most industrialized countries which release GDP on a quarterly basis. The indicator rose to 0.4% last month, edging above the estimate of 0.3%. Little change is expected in the upcoming release, with the estimate of 0.3%.
  4. Raw Materials Price Index: Friday, 12:30. This indicator measure the change in inflation in the manufacturing sector. The index jumped 1.1%, last month, its best showing since March. This easily beat the estimate of o.6%. The forecast for July stands at 0.7%.

* All times are GMT.

USD/CAD Technical Analysis

USD/CAD opened the week at 1.0893 and dipped to a low of 1.0875. The Canadian dollar then reversed direction and climbed to a high of 1.0986, breaking past resistance at 1.0944. The pair closed the week at 1.0935.

Live chart of USD/CAD:

Technical lines, from top to bottom:

We start with resistance at 1.1494. This line has remained intact since November 2006, when the US dollar broke through and continued to rally to a high above the 1.18 line.

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. This is followed by resistance at 1.1123.

1.1054 marked an important resistance line in April and has held firm since then.

1.0944 was easily breached as the Canadian dollar lost ground and came close to the 1.10 level. It recovered and starts off the weak as a resistance line.

1.0815 has some breathing room in support as the pair trades above the 1.09 line.

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. The US dollar has improved sharply since then, as the pair trades close to 1.10.

1.0526 has been a strong support line since late November.

1.0422 was a key support line in mid-November. This is the final line for now.

I am bullish on USD/CAD

The US economy continues to hum smoothly and the Federal Reserve is expected to raise rates sometime next year. US GDP for Q2 is expected to be close to 3.9%, and a strong reading could give a broad boost to the US dollar.

Further reading:

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

USD/CAD Forecast July 14-18

USD/CAD Forecast July 14-18

The Canadian dollar lost close to a cent last week, as USD/CAD broke above the 1.07 line, closing at 1.0732. There are a host of key events in the upcoming week, highlighted by Manufacturing Sales and Core CPI. Here is an outlook on the major events and an updated technical analysis for USD/CAD. Canadian employment numbers were a big disappointment last

USD/CAD Forecast July 7-11

USD/CAD Forecast July 7-11

The Canadian dollar was almost unchanged last week, as USD/CAD closed at 1.0650. This week’s highlights are Building Permits, Ivey PMI and Employment Change. Here is an outlook on the major events and an updated technical analysis for USD/CAD. US employment numbers sparkled last week, led by Nonfarm Payrolls, which hit 288 thousand. As well, the Unemployment Rate dipped to 6.1%. Canadian GDP posted

USD/CAD Forecast June 30-July 4

USD/CAD Forecast June 30-July 4

The Canadian dollar continues to improve, as USD/CAD dropped close to 100 points for the second straight week. The pair closed at 1.0662. This week has just two releases on the calendar – GDP and Trade Balance. Here is an outlook on the major events and an updated technical analysis for USD/CAD. US GDP for Q1 shocked the markets with a

USD/CAD Forecast June 23-27

USD/CAD Forecast June 23-27

The Canadian dollar climbed to six-month highs last week, as USD/CAD dropped about 100 points last week, closing at 1.0756. This week’s sole release is RMPI. Here is an outlook on the major events and an updated technical analysis for USD/CAD. The Canadian dollar posted strong gains thanks to improved readings from Canadian inflation and retail sales numbers. In the US, the Federal Reserve