Category: Canadian Dollar Forecast

USD/CAD Forecast Aug. 3-7



The Canadian dollar posted minor losses last week, as USD/CAD slightly below the 1.31 line. There are only five events this week, but all are major indicators. Here is an outlook on the major market-movers and an updated technical analysis for USD/CAD.

The Canadian dollar weakened late in the week following a disappointing GDP reading of -0.2%, its fourth decline in the past five readings. In the US, the Federal Reserve remained cautious but did acknowledge improvement in the US economy. Advance GDP rebounded with a gain of 2.6% in Q2, but this fell short of the estimate.

Updates:

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

USD_CAD_Forecast.Aug6-10

  1. Trade Balance: Wednesday, 12:30. Canada continues to post trade balance deficits, with the May reading coming it at C$-3.3 billion. This was worse than the forecast of C$-2.6 billion. The markets are expecting better news in the June reading, with an estimate of C$-2.1 billion.
  2. Building Permits: Friday, 12:30. Building Permits tends to show a lot of volatility, leading to readings which are often far off from the estimates. This was the case in May, when the indicator plunged 14.5%. The markets had expected a decline of only -5.2%. June should bring better news, with an estimate of +2.6%.
  3. Employment Change: Friday, 12:30. This is one of the key economic indicators, and an unexpected reading can have a significant impact on the movement of USD/CAD. After an outstanding reading in May, the indicator disappointed in May, with a decline of 6.4 thousand. However, the markets are anticipating a strong turnaround, with a forecast of 5.7 thousand. Canada’s unemployment rate has not budged from 6.8% since January, and no change is expected in the upcoming reading.
  4. Ivey PMI: Friday, 14:00. The index has posted readings well above the 50-point line since April, indicative of steady expansion. Little change is expected in the July reading, with a forecast of 56.2 points.

* All times are GMT.

USD/CAD Technical Analysis

USD/CAD opened the week at 1.3042 and slipped to a low of 1.2857. The pair then reversed directions, climbing to a high of 1.3092, breaking above resistance at 1.3063 (discussed last week). USD/CAD closed the week at 1.3086.

Live chart of USD/CAD:


Technical lines, from top to bottom

We start with resistance at 1.3443.

1.3346 has held firm since August 2004.

1.3165 is the next line of resistance.

1.3063 is protecting the symbolic line of 1.30.

1.2924 was tested in support for a second straight week, as the pair dipped before recovering.

1.2798 is the next line of support.

1.2673 marked the start of the current greenback rally which has seen the pair push close to the 1.31 level.

1.2541 is the final support level for now.

I am bullish on USD/CAD

The Canadian dollar continues to struggle against its US counterpart, and we could see the pair continue to rise if key indicators such as Employment Change do not meet expectations. The Fed is keeping a low profile but speculation remains high that rates will rise, perhaps as early as September.

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Further reading:

USD/CAD Forecast July 27-31

USD/CAD Forecast July 27-31

The Canadian dollar was almost unchanged last week, as USD/CAD closed slightly above the 1.30 line. This week’s highlight is GDP. Here is an outlook on the major market-movers and an updated technical analysis for USD/CAD. US numbers enjoyed a good week, as New Home Sales jumped and unemployment claims dropped dramatically. Canadian data was mixed, as Wholesale Sales slipped, while [&hellip

USD/CAD Forecast July 20-24

USD/CAD Forecast July 20-24

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USD/CAD Forecast July 13-17

USD/CAD Forecast July 13-17

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USD/CAD Forecast July 6-10

USD/CAD Forecast July 6-10

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USD/CAD Forecast June 29 – July 3

USD/CAD Forecast June 29 – July 3

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USD/CAD Forecast June 22-26

USD/CAD Forecast June 22-26

The Canadian dollar had an uneventful week, as USD/CAD posted slight losses. The pair closed the week at 1.2259. The upcoming week is very quiet, with only one release this week. Here is an outlook on the major market-movers and an updated technical analysis for USD/CAD. In the US, the news was mixed as inflation slipped, while employment [&hellip

USD/CAD Forecast June 15-19

USD/CAD Forecast June 15-19

The Canadian dollar enjoyed an excellent week, as USD/CAD dropped about 140 points. There are 7 events this week. Here is an outlook on the major market-movers and an updated technical analysis for USD/CAD. In the US, data was generally upbeat, but traders were hesitant to buy the greenback ahead of the Fed Statement. In Canada, Building Permits [&hellip

USD/CAD Forecast June 8-12

USD/CAD Forecast June 8-12

USD/CAD showed little change last week, closing at 1.2427. This week’s major event is Building Permits. Here is an outlook on the major market-movers and an updated technical analysis for USD/CAD. In the US, an excellent gain in jobs helped the US dollar posts gains late in week against its Canadian counterpart. North of the border, an outstanding Canadian Employment [&hellip

USD/CAD Forecast June 1-5

USD/CAD Forecast June 1-5

USD/CAD enjoyed another strong week, gaining about 150 points. The pair closed the week at 1.2453, its highest close since early April. This week’s major event is Employment Change. Here is an outlook on the major market-movers and an updated technical analysis for USD/CAD. In the US, the dollar got a boost from strong core durables data and managed to weather [&hellip