Category: Canadian Dollar Forecast

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. In the US, the news was not as positive, as retail sales and consumer sentiment numbers softened in July.

Updates:

USD/CAD daily chart with support and resistance lines on it.

Click to enlarge: USDCAD Forecast AUG18-22

  1. Foreign Securities Purchases: Monday, 12:30. This indicator is directly linked to currency demand, as foreigners must purchase Canadian dollars in order to buy Canadian securities. The indicator had an outstanding June, jumping to $21.43 billion, a two-year high. This easily beat the estimate of $14.23 billion. The markets are expecting a weaker showing in July, with the estimate standing at $14.68 billion.
  2. Wholesale Sales: Wednesday, 12:30. Wholesale Sales jumped 2.2% last month, crushing the estimate of 0.7%. This was the indicator’s sharpest gain since June 2013. The markets are expecting a more modest gain in the upcoming release, of 1.3%.
  3. Core CPI: Friday, 12:30. Core CPI excludes the more volatile items found in CPI, making it a more accurate gauge of consumer inflation. The index posted a decline of 0.1% last month, its first decline in 2014. Little change is expected in the July reading, with the estimate standing at a flat 0.0%.
  4. Core Retail Sales: Friday, 12:30. This indicator excludes automobile sales, which are included in Retail Sales and can result in a distorted reading. The indicator slipped to 0.1%, down from 0.7% a month earlier. The markets are expecting  a strong turnaround in July, with a forecast of 0.6%. Will the indicator meet or beat this rosy prediction?
  5. CPI: Friday, 12:30. CPI had its worst reading of the year last month, slipping  to 0.1%. However, this did match the estimate. The index is expected to post a decline of -0.1%, which would be the indicator’s first negative reading of the year.
  6. Retail Sales: Friday, 12:30. Retail Sales posted a respectable gain of 0.7% last month, edging above the estimate of 0.6%. Little change is expected in the upcoming release, with an estimate of 0.6%.

* All times are GMT.

USD/CAD Technical Analysis

USD/CAD opened the week at 1.0972 and touched a high of 1.0977. The Canadian dollar then pushed higher. The pair fell to a low of 1.0860, as support at 1.0815 (discussed last week) remained firm. USD/CAD closed the week at 1.0894, its lowest level since late July.

Live chart of USD/CAD:


Technical lines, from top to bottom:

We begin 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.

1.1123 remains a strong resistance line.

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

1.0944 was easily breached as the Canadian dollar recorded strong gains. It has switched to a resistance role.

1.0815 continues to provide support. It held firm as the pair dropped into the mid-1.08 range.

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 Canadian dollar had a good week, but upcoming inflation and retail sales data is expected to be soft. Unless these numbers show unexpected strength, the US dollar has a good chance of recovering from last week’s losses.

Further reading:

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

USD/CAD Forecast June 16-20

USD/CAD Forecast June 16-20

The Canadian dollar reversed directions last week, as USD/CAD dropped about 80 points, closing at 1.0853. This week’s highlights are Core CPI and Core Retail Sales.  Here is an outlook on the major events and an updated technical analysis for USD/CAD. The Canadian dollar managed to move higher last week, and shrugged off a dismal Manufacturing Sales release late in the