Category: Canadian Dollar Forecast

USD/CAD Forecast Mar. 2-6



USD/CAD showed movement in both directions but closed the week almost unchanged at the 1.25 line. There are 8 events this week, highlighted by GDP. Here is an outlook on the major market-movers and an updated technical analysis for USD/CAD.

In the US, Janet Yellen’s testimony signaled that a Fed rate hike is not imminent and that wage growth and inflation will need to improve before the Fed makes a move. Canadian inflation levels remain weak, but were within expectations.

Updates:

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

USDCAD_Forecast Mar.3-6

  1. Current Account: Monday, 13:30. This quarterly indicator is closely linked to currency demand, as foreigners must purchase Canadian goods and services with Canadian dollars. The current account deficit improved to C$ -8.4 billion in Q3, easily beating the estimate of C$ -10.3 billion. This positive trend is expected to continue, with an estimate of C$-7.4 billion for Q4.
  2. GDP: Tuesday, 13:30. GDP is one of the most important economic indicators and should be treated as a market-mover. The indicator disappointed in November, with a decline of 0.2%. This marked the indicator’s weakest showing since December. The markets are expecting a turnaround in the upcoming release, with an estimate of 0.1%.
  3. RMPI: Tuesday, 13:30. The Raw Materials Price Index continues to post sharp declines, and slipped to -7.6%. Still, this beat the forecast of -8.8%. Another strong decline is expected, with the estimate standing at -6.8%.
  4. BOC Overnight Rate: Wednesday, 15:00. The Bank of Canada shocked the markets in February, cutting rates from 1.0% to 0.75%. The markets are not expecting any change in the rates in the upcoming announcement.
  5. Ivey PMI: Thursday, 15:00. Ivey PMI was unexpectedly weak in January, slipping to 45.4 points. This was the first time the indicator dropped below the 50-point level since June and was well off the estimate of 53.8 points. The forecast for January stands at 46.2 points.
  6. Building Permits: Friday, 13:30. Building Permits shows strong volatility, often leading to readings that are not within expectations. In January, the indicator bounced back with an excellent gain of 7.7%, crushing the estimate of 7.7%.
  7. Trade Balance: Friday, 13:30. Trade Balance has been very steady, with the December reading coming in unchanged at $C-0.6 billion. This easily beat the estimate of C$-1.2 billion. The markets are expecting a strong turnaround, with a gain of C$ +0.3 billion
  8. Labor Productivity: Friday, 13:30. This indicator is released on a quarterly basis, magnifying the impact of each release. In Q3, the indicator posted a weak gain of 0.1%, within expectations. Little change is expected in the upcoming release.

* All times are GMT

USD/CAD Technical Analysis

USD/CAD opened the week at 1.2534 and climbed to a high of 1.2663. The pair then reversed directions and dropped to a low of 1.2388, just shy of support at 1.2387 (discussed last week). USD/CAD closed the week at the 1.2502.

Live chart of USD/CAD:




Technical lines, from top to bottom

We begin with resistance at 1.2924. This line was last tested in March 2009.

1.2711 is the next line of resistance.

1.2541 continued to see action last week. This line is currently a weak resistance line.

1.2387 is an immediate support line. It held firm as the pair touched a low of 1.2388.

1.2230 is the next support level.

1.2114 is the final support line for now. This line switched to a support role late January when the US dollar started a strong rally.

I am bullish on USD/CAD

Canadian growth continues to lag behind its southern neighbor, and this could be underscored by weak GDP and inflation data this week. In the US, Fed chair Yellen tried to dampen expectations about a mid-rate hike in her Congressional testimony, but a strong NFP could boost the June rate expectations.

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Further reading:

USD/CAD Forecast Feb. 23-27

USD/CAD Forecast Feb. 23-27

The Canadian dollar posted modest losses last week, as USD/CAD closed at 1.2528. 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. Canadian Wholesale Sales looked sharp, jumping 2.5%. The Fed minutes were dovish in stance, as policymakers raised concerns that a rate hike might hurt the

USD/CAD Forecast Feb. 16-20

USD/CAD Forecast Feb. 16-20

The Canadian dollar posted modest gains last week, as USD/CAD closed at 1.2446. This week’s highlights are Wholesale Sales and Core Retail Sales. Here is an outlook on the major market-movers and an updated technical analysis for USD/CAD. Canadian Manufacturing Sales was unexpectedly strong, posting an excellent gain of 1.7%. Over in the US, it was a rough week for key numbers.

USD/CAD Forecast Feb. 9-13

USD/CAD Forecast Feb. 9-13

The Canadian dollar posted its first winning week since early December, as USD/CAD gained about 160 points last week. This week’s highlight is Manufacturing Sales. Here is an outlook on the major market-movers and an updated technical analysis for USD/CAD. USD/CAD showed strong movement last week, and the Canadian dollar finally managed to post a winning week. Canadian

USD/CAD Forecast Feb. 2-6

USD/CAD Forecast Feb. 2-6

The Canadian dollar continued its sharp descent, losing close to 300 points last week. USD/CAD has now gained a remarkable 11 cents in the month of January. This week’s highlights are Building Permits and Employment Change. Here is an outlook on the major market-movers and an updated technical analysis for USD/CAD. It was another week

USD/CAD Forecast Jan. 26-30

USD/CAD Forecast Jan. 26-30

The Canadian dollar was in free-fall last week, falling a remarkable 450 points. USD/CAD closed the week at 1.2411, its highest level since April 2009. This week’s sole release is GDP. Here is an outlook on the major market-movers and an updated technical analysis for USD/CAD. The loonie tumbled after the Bank of Canada unexpectedly cut

USD/CAD Forecast Jan. 19-23 2015

USD/CAD Forecast Jan. 19-23 2015

The Canadian dollar lost over 100 points last week, as USD/CAD tested the 1.20 line. This was its highest level since May 2009. The pair closed the week at 1.1975. There are 8 events this week, highlighted by Core Retail Sales and Core CPI. Here is an outlook on the major market-movers and an updated

USD/CAD Forecast Jan. 12-16 2015

USD/CAD Forecast Jan. 12-16 2015

The Canadian dollar continued to lose ground last week. USD/CAD approached the 1.19 line, its highest level since May 2009. This week’s sole release is the Bank of Canada Business Outlook Survey. Here is an outlook on the major market-movers and an updated technical analysis for USD/CAD. The tale of two economies continues, as the US economy outperforms its northern

USD/CAD Forecast Jan. 5-9 2015

USD/CAD Forecast Jan. 5-9 2015

The Canadian dollar enjoyed a quiet week until Friday, when USD/CAD jumped 150 points. The pair closed at 1.1772, its highest level since May 2009. This week’s highlights are Building Permits and Employment Change. Here is an outlook on the major market-movers and an updated technical analysis for USD/CAD. There were no Canadian releases last week, so US events took on

USD/CAD Forecast Dec. 29 – Jan. 2

USD/CAD Forecast Dec. 29 – Jan. 2

The Canadian dollar was unchanged last week, as USD/CAD closed the week at 1.1615. There are no Canadian releases in the upcoming week. Here is an outlook on the major market-movers and an updated technical analysis for USD/CAD. In the US, key releases painted a mixed picture. The final read of GDP for Q3 was excellent, with a rate of 5% annualized