Home USD/CAD Forecast June 29 – July 3

It was  another uneventful week for the  Canadian dollar  as  USD/CAD  was unchanged.  The pair closed the week at the 1.23 line. The upcoming week  has just two events, but the GDP release could have a strong effect on the movement of USD/CAD.    Here is an outlook on the major market-movers and an updated technical analysis for USD/CAD.

In the US housing numbers were strong,  and the week ended with excellent consumer sentiment data. Still, US Final GDP  declined by 0.2%, matching the forecast. There were no Canadian economic releases last week.

[do action=”autoupdate” tag=”USDCADUpdate”/]

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

USD_CAD_Forecast.Jun29-July3

 

  1. RMPI:  Monday, 12:30.  RMPI is the primary gauge of inflation in the manufacturing sector. The index tends to show a lot of volatility, often leading to readings that are well off the estimates. In April, the indicator bounced back with a sharp gain of 3.8%, easily beating the forecast of 1.7%.  Will the indicator repeat with another strong release?
  2. GDP:  Tuesday, 12:30. GDP is one of the most important economic indicators, and traders should treat it as a market-mover. Canada releases GDP on a monthly basis, unlike most other developed economies which publish the indicator each quarter. The indicator has struggled, posting just one gain in 2014. The indicator declined by 0.2% in March, shy of the estimate of +0.2%.  The markets are expecting better news in the April report, with an estimate  of  +0.1%.

* All times are GMT.

USD/CAD Technical Analysis

USD/CAD opened the week at 1.2275 and  quickly dropped to a low of 1.2218, testing support at 1.2230 (discussed last week). The pair then reversed directions, climbing to a high of 1.2423.  USD/CAD closed the week at 1.2300.

Live chart of USD/CAD: [do action=”tradingviews” pair=”USDCAD” interval=”60″/]

Technical lines, from top to bottom

1.2798 has remained intact since mid-March.

1.2646 is the next resistance line.

1.2541 has provided an important cap in June.

1.2386  remains an  immediate support level.

1.2230 was tested in support  for a second straight week as USD/CAD softened early in the week before recovering.

1.2114 is a strong support level.

1.1995 is situated just  below the symbolic  1.20 level. This line has remained intact since mid-May.

1.1873 is the final support level for now.

I am bullish on USD/CAD

The FOMC may be slightly more hawkish than perceived, as a Fed policymaker spoke of one or even two rate hikes in 2015. If there are further hints about a rate hike, the greenback could jump higher. Over in Canada, GDP has struggled, and a weaker than expected reading could hurt the loonie.

In our latest podcast, we discuss building on the US recovery, the Greek crisis and EUR, Saudi solar and next week’s events.

Follow us on Stitcher.

Further reading:

 

Kenny Fisher

Kenny Fisher

Kenny Fisher - Senior Writer A native of Toronto, Canada, Kenneth worked for seven years in the marketing and trading departments at Bendix, a foreign exchange company in Toronto. Kenneth is also a lawyer, and has extensive experience as an editor and writer.