The Canadian dollar lost close to a 100 points last week, as USD/CAD jumped late in the week and closed at 1.3186. There are just three events this week. Here is an outlook on the major market-movers and an updated technical analysis for USD/CAD.
The Fed minutes brought more uncertainty to the timing of a rate hike, as the Fed is clearly hesitant about raising rates in September. US employment numbers were steady and housing numbers beat expectations. Canadian retail sales numbers were stronger than expected but the loonie still swooned late in the week.
[do action=”autoupdate” tag=”USDCADUpdate”/]USD/CAD daily chart with support and resistance lines on it. Click to enlarge:
- BOC Deputy Governor Lawrence Schembri Speaks: Tuesday, 16:25. Schembri will speak at an event in Kingston. A speech which is more hawkish than expected is bullish for the Canadian dollar.
- Corporate Profits: Thursday, 12:30. This indicator has been struggling, posting two straight declines. The Q1 release was dismal, with a reading of -6.0%. Will the indicator rebound into positive territory in Q2?
- RMPI: Friday, 12:30. RMPI measures the change in inflation in the manufacturing sector. The June reading came in at a flat 0.0%, well below the forecast of 1.1%.
* All times are GMT.
USD/CAD Technical Analysis
USD/CAD opened the week at 1.3100 and dropped to a low of 1.3024. The pair posted strong gains late in the week, climbing to a high of 1.3192, punching above support at 1.3165 (discussed last week). USD/CAD closed the week at 1.3186.
Live chart of USD/CAD: [do action=”tradingviews” pair=”USDCAD” interval=”60″/]
Technical lines, from top to bottom
We start with resistance at 1.3587.
1.3443 was a cap in December 2003.
1.3346 has held firm since August 2004.
1.3213 was an important cap in early August.
1.3165 was breached and has switched to a support level. It is a weak line and could see action early in the week.
1.3063 is protecting the symbolic line of 1.30. It has strengthened as the pair posted gains last week.
1.2924 has held firm since late July.
1.2798 is the next line of support.
1.2673 is the final support line for now.
I am bullish on USD/CAD
Continuing worries about China and Greece could hurt minor currencies like the Canadian dollar. As well, falling oil prices will likely continue to weigh on the struggling Canadian dollar.
In our latest podcast we collect the crashes: commodities, Fed hike and later Greece
Further reading:
- For a broad view of all the week’s major events worldwide, read the USD outlook.
- For EUR/USD, check out the Euro to Dollar forecast.
- For the Japanese yen, read the USD/JPY forecast.
- For GBP/USD (cable), look into the British Pound forecast.
- For the Australian dollar (Aussie), check out the AUD to USD forecast.
- For the kiwi, see the NZDUSD forecast.
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