Category: Canadian Dollar Forecast

USD/CAD Forecast Nov. 24-28



The Canadian dollar showed some movement in both directions but was little changed at week’s end. USD/CAD posted slight losses, closing the week at 1.1231. This week’s highlights are Retail Sales and GDP. Here is an outlook on the major market-movers and an updated technical analysis for USD/CAD.

Canadian Wholesale Sales impressed with a sharp gain in September. The Canadian dollar held its own despite solid US inflation, housing and manufacturing numbers out of the US.

Updates:

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

USDCADForecast Nov.24-28

  1. Core Retail Sales: Tuesday, 13:30. This indicator excludes the most volatile items which are included in Retail Sales. The indicator has looked awful, posting two straight declines. However, the estimate for the upcoming release stands at 0.4%. Will the indicator meet or beat the prediction?
  2. Retail Sales: Tuesday, 13:30. Retail Sales is the primary gauge of consumer spending, a key component of engine growth. The indicator has also posted two straight declines, but the October reading is expected to post a respectable gain of 0.6%.
  3. Corporate Profits. Tuesday, 13:30. The indicator is released each quarter, magnifying the impact of each release. The indicator slowed down in Q2 but still posted a gain of 2.6%, marking four consecutive quarters of growth.
  4. Current Account: Thursday, 13:30. Canada continues to post current account deficits, but showed some improvement last quarter with a reading of C$11.9 billion. The deficit for Q3 is expected to narrow to C$10.3 billion.
  5. GDP: Friday, 13:30. GDP is one of the most important economic indicators and should be treated by traders as a market-mover. Unlike most other industrial economies, Canada releases GDP each month. The markets are expecting better news in the September reading, with an estimate of 0.4%.
  6. RMPI: Friday, 13:30. The Raw Materials Price Index measures inflation in the manufacturing sector. The index has looked very weak, posting four declines in the past five readings. The October release is expected to bring better tidings, with an estimate of 1.5%.

* All times are GMT.

USD/CAD Technical Analysis

USD/CAD opened the week at 1.1289 and climbed to a high of 1.1369. The pair then reversed directions and fell to a low of 1.1190. USD/CAD closed the week at 1.1231, as resistance at 1.1271 (discussed last week) remains in place.

Live chart of USD/CAD:


Technical lines, from top to bottom:

We begin with resistance at 117.52. This lined marked the start of a rally by the Canadian dollar in February 2007, which saw USD/CAD drop below parity. 1.1640 is next.

1.1494 remains a strong line. It was a key resistance line in November 2006.

1.1333 was tested by the pair for a third straight week. It has some breathing room, with the pair trading close to the 1.12 line.

1.1271 continues to see action and has switched to a resistance role. It is a weak line and could face pressure early in the week.

1.1122 marks the low point of a US dollar rally which started late in October and saw USD/CAD climb above 1.14 earlier in November.

1.1054 remains a strong support line. 1.0944 is next.

1.0815 has held firm since late August. It is the final support line for now.

I remain neutral on USD/CAD

Canadian numbers have shown some improvement, and strong US data is usually good news for the Canadian economy, which is heavily dependent on its southern neighbor. If Canadian GDP meets expectations, the Canadian dollar could get a boost.

In our latest podcast, we talk about the state of US housing, run down the FOMC minutes, the Japanese jump, the Draghi drama and also talk oil:

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Download it directly here.
Subscribe to our podcast on iTunes.

Further reading:

USD/CAD Forecast Nov. 17-21

USD/CAD Forecast Nov. 17-21

The Canadian dollar posted modest gains last week, as USD/CAD closed the week at 1.1286. This week’s highlights are Wholesale Sales and Core CPI. Here is an outlook on the major market-movers and an updated technical analysis for USD/CAD. US employment numbers were not impressive last week, as jobless claims missed expectations and JOLTS softened. Still, there was a silver

USD/CAD Forecast November 10-14

USD/CAD Forecast November 10-14

The Canadian dollar broke above the 1.14 line but recovered and showed little change on the week. USD/CAD closed the week at 1.1326. This week’s key release is Manufacturing Sales. Here is an outlook on the major market-movers and an updated technical analysis for USD/CAD. US Nonfarm Payrolls slipped to 214 thousand, well short of the estimate of 235

USD/CAD Forecast November 3-7

USD/CAD Forecast November 3-7

The Canadian dollar was almost unchanged last week, with USD/CAD closing at 1.1254. There are a number of key releases, highlighted by Ivey PMI and Employment Change. Here is an outlook on the major market-movers and an updated technical analysis for USD/CAD. In a symbolic move, the Federal Reserve ended its QE program and issued a hawkish policy statement. GDP looked sharp, pointing

USD/CAD Forecast Oct. 27-31

USD/CAD Forecast Oct. 27-31

The Canadian dollar had showed some strength last week, with USD/CAD closing with modest losses. The pair closed the week at 1.1228. This week’s highlights include GDP and an appearance by BoC head Stephen Poloz before a parliamentary committee. Here is an outlook on the major market-movers and an updated technical analysis for USD/CAD. The Canadian dollar shrugged off a weak consumer spending data,

USD/CAD Forecast October 20-24

USD/CAD Forecast October 20-24

The Canadian dollar returned to its losing ways last week, as USD/CAD gained about 100 points, closing at 1.1275. This week’s highlights are Core Retail Sales and the Overnight Rate. Here is an outlook on the major market-movers and an updated technical analysis for USD/CAD. The US dollar shrugged off weakness in US retail sales and a poor PPI

USD/CAD Forecast Oct. 13-17

USD/CAD Forecast Oct. 13-17

The Canadian dollar posted weekly gains for the first time in three weeks, as USD/CAD closed slightly below the 1.12 line. This week’s highlights are Manufacturing Sales and Core CPI. Here is an outlook on the major market-movers and an updated technical analysis for USD/CAD. Canadian job data was outstanding, as Employment Claims jumped to their highest level in over a

USD/CAD Forecast Oct. 6-10

USD/CAD Forecast Oct. 6-10

The Canadian dollar lost close to a cent last week, as USD/CAD closed above the 1.12 line for the first time since March. 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. Canada’s trade balance posted a deficit for the first time in three months.

USD/CAD Forecast Sep. 29-Oct. 3

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

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