Looking for the latest outlook for this week? Check the full section: USD/CAD Forecast.
After Mark Carney hurt the Canadian dollar in last week’s rate decision, he has a chance to change that in three public appearances this week. Here’s an outlook for this week’s events in Canada, and an updated technical analysis for USD/CAD.
Apart from the rate decision, retail sales were better than expected last week. That wasn’t enough. Let’s review the events in the Canada this week – note the one that closes the week:
- Mark Carney talks I: The governor of the Bank of Canada will speak this week in three separate occasions. After the dovish rate statement that hurt the Canadian dollar, Carney can move the loonie both ways. He’ll first speak in Montreal about financial regulation on Monday at 13:10 GMT. If he won’t speak about the topic, the Canadian dollar will move.
- Mark Carney talks II, III: The second speech is the most important one: Carney will testify in front of the Standing Committee on Finance in parliament. The subject is last week’s Monetary Policy Report that hurt the loonie. This will take place on Tuesday at from 15:00 GMT, and will take a long time. The third speech continues the second one, and will happen on Wednesday at 20:00 GMT. He’ll appear again with deputy governor Paul Jenkins in front of the same committee.
- RMPI: The Raw Materials Price Index is important for Canada’s commodity oriented economy. Raw materials rose by 3.7% last time, and fell in the same scale beforehand. This time, a steady rise of 1.1% is expected. This could be higher due to the recent rise in oil prices, which impacts all raw materials.
- GDP: Canada’s monthly GDP release is due on Friday at 12:30 GMT. The long months of contraction stopped two months ago with a rise of 0.1% in the GDP. Last time, the economy stalled. It’s expected to rise this time by 0.1%. Data refers to August. This is the most important event of the week. Any outcome will move the Canadian dollar.
USD/CAD Technical Analysis
The Canadian dollar began the week by strengthening: USD/CAD went as low as 1.0270. The dovish statement sent it flying high, initially stopping at 1.0528, before peaking at 1.0580. It closed at 1.0534, gaining about 150 pips.
In last week’s USD/CAD outlook, I’ve mentioned the 1.0435 line. After being broken during the week several times, it’s gone now. 1.02 remains a stronghold. It was the lowest point this year. Below that, parity is awaiting the pair, but it’s not so near now.
Looking up, 1.0625 serves as a resistance line, after being a support line in recent months. Further above, 1.08 is in the distance.
I continue to be bearish on USD/CAD, despite the recent blow. The Canadian economy is steadily recovering. I believe that this week’s GDP release will help the Canadian dollar.
Further reading:
- For a broad view of all the week’s major event in all currencies, read the forex weekly outlook.
- For the Euro, read the EUR USD Forecast.
- For GBP/USD, look into the British Pound forecast.
- For the Australian dollar, read the AUD/USD forecast.
- For USD/CAD, check out the Canadian dollar forecast.
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