Category: Canadian Dollar Forecast

USD/CAD Outlook April 21-25



For the second straight week the Canadian dollar showed little change, closing slightly above the 1.10 line. This week has just three releases, highlighted by Core Retail Sales.  Here is an outlook on the major events and an updated technical analysis for USD/CAD.

Canadian Manufacturing Sales posted strong gains for the second straight month, and the Bank of Canada held its benchmark interest rate, as expected. In the US, Unemployment Claims beat the estimate, while dovish comments by Fed chair Janet Yellen weighed on the greenback.

Updates:

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

Click to enlarge:   USDCAD Outlook Apr21-25

  1. Wholesale Sales: Tuesday, 12:30. Wholesale Sales bounced back in February, posting a gain of 0.8%. However, this fell short of the estimate of 1.2%. The markets are expecting a similar reading in the upcoming release, with the estimate standing at 0.7%.
  2. Core Retail Sales: Wednesday, 12:30. This is the key event of the week. Core Retail Sales excludes automobile sales, which makes it a more reliable gauge of consumer spending than Retail Sales. The indicator posted a gain of 1.0%, marking a six-month high. The markets are expecting a smaller gain of 0.6% in the March reading.
  3. Retail Sales: Wednesday, 12:30. Retail Sales is considered the primary gauge of consumer spending. The indicator looked sharp in March, posting a gain of 1.3%, well above the estimate of 0.8%. This was the highest gain in close to a year. The April estimate is significantly weaker, with an estimate of 0.5%.

*All times are GMT.

USD/CAD Technical Analysis

USD/CAD opened the week at 1.0975 and dropped to a low of 1.0942, breaking through support at 1.0945 (discussed last week). The pair then reversed directions, rising to a high of 1.1034. USD/CAD closed the week at 1.1019.

Live chart of USD/CAD:


Technical lines, from top to bottom:

We start with resistance at 1.1617, which marked a high point for the pair in July 2009, when the Canadian dollar posted a rally in which USD/CAD dipped below the 0.94 line.

1.1535 provided key support back in early 2007. It has been a resistance line since July 2009.

1.1369 fell in October 2008 as the US dollar posted sharp gains, climbing as high as the 1.21 level.

1.1124 remains a strong resistance line. It has held firm since late March.

The key psychological barrier of 1.10 was breached again last week, and has switched to a support role. It is a weak line and could see more action early this week.

1.0945 is the next line of support for the pair. It was breached as the Canadian dollar showed some strength before retracting.

1.0853 is a strong support line. It has remained intact since January.

1.0723 was a cap in mid-2010, before the US dollar tumbled and dropped all the way into 0.93 territory.

1.0660 saw a lot of activity in the second half of December and continues to provide strong support.

1.0519 is the final support level for now. It has been a strong support line since late November.

I am bullish on USD/CAD

The Canadian dollar has made some breakthroughs below the 1.10 line, but has not been able to consolidate these gains. US releases have looked solid for the most part, and the Fed will likely trim QE at the end of the month, which is US dollar -positive.

Further reading:

USD/CAD Outlook April 14-18

USD/CAD Outlook April 14-18

The Canadian dollar dropped below the 1.09 last week for the first time since January. However, it was unable to hold onto these gains and closed the week almost unchanged, at 1.0968. This week’s highlights include Manufacturing Sales, the Overnight Rate and Core CPI.  Here is an outlook on the major events and an updated technical analysis for USD/CAD.

USD/CAD Outlook April 7-11

USD/CAD Outlook April 7-11

The Canadian dollar showed some improvement on Friday and gained close to a cent on the week. The pair closed below the 1.10 level, at 1.0969. There are just four events this week, highlighted by Building Permits. Here is an outlook on the major events and an updated technical analysis for USD/CAD. The Canadian dollar got

USD/CAD Outlook Mar 31-Apr 4

USD/CAD Outlook Mar 31-Apr 4

The Canadian dollar rebounded nicely last week, as USD/CAD dropped about 160 points. The pair closed at 1.1059. There are a host of major events this week, highlighted by GDP and Employment Change. Here is an outlook on the major events and an updated technical analysis for USD/CAD. In the US, Unemployment Claims continue to improve

USD/CAD Outlook March 24-28

USD/CAD Outlook March 24-28

The Canadian dollar lost over a cent last week, as USD/CAD closed above the 1.12 level. The loonie is currently trading at its lowest level since July 2009. It’s a very quiet week coming up, with just one release on the schedule. Here is an outlook on the major events and an updated technical analysis for

USD/CAD Outlook March 17-21

USD/CAD Outlook March 17-21

The Canadian dollar did not have an eventful week, and was almost unchanged at week’s end, as USD/CAD closed just above the 1.11 line. This week’s highlights are Manufacturing Sales, Core CPI and Core Retail Sales. Here is an outlook on the major events and an updated technical analysis for USD/CAD. In the US, retail sales numbers met expectations, while

USD/CAD Outlook March 10-14

USD/CAD Outlook March 10-14

The Canadian dollar was almost unchanged at the end of the week, closing slightly below the 1.111 line. The upcoming week is very quiet week, with just two releases. Here is an outlook on the major events and an updated technical analysis for USD/CAD. Canadian Employment Change disappointed on Friday, countering some strong data from Building Permits and

USD/CAD Outlook March 3-7

USD/CAD Outlook March 3-7

The Canadian dollar continues to trade at high levels, but managed to post slight gains against the US dollar last week, as USD/CAD closed at 1.1060. The upcoming week is a busy one, highlighted by Building Permits and Employment Change. Here is an outlook on the major events and an updated technical analysis for USD/CAD. Canadian GDP

USD/CAD Outlook Feb. 24-28

USD/CAD Outlook Feb. 24-28

The Canadian dollar lost over a cent this week, as USD/CAD closed just above the 1.11 line. There are three events this week, highlighted by GDP. Here is an outlook on the major events and an updated technical analysis for USD/CAD. The loonie took in on the chin on Friday, as a sharp decline in Retail Sales

USD/CAD Outlook Feb. 17-21

USD/CAD Outlook Feb. 17-21

The Canadian dollar posted modest gains last week, as USD/CAD closed at 1.0974. This week’s key events are Core CPI and Core Retail Sales. Here is an outlook on the major events and an updated technical analysis for USD/CAD. Canadian Manufacturing Sales declined by 0.9% in January, an eight-month low. In the US, Unemployment Claims was above the