USD/CAD was almost unchanged on the week, as the Canadian dollar closed the week at 1.0633. The upcoming week has a very light schedule, with just three releases. Here is an outlook on the major market-movers and an updated technical analysis for USD/CAD.
Both the US and Canada posted sharp employment numbers last week. In the US, Unemployment Claims continued to drop, while Non-Farm Payrolls remained strong and easily beat the estimate. North of the border, Canadian Employment Change rose nicely, climbing to a three-month high.
[do action=”autoupdate” tag=”USDCADUpdate”/]USD/CAD daily chart with support and resistance lines on it. Click to enlarge: 
- Housing Starts: Monday, 13:15. Housing Starts have been moving higher and climbed to 198 thousand in October, beating the estimate of 192 thousand. Another strong reading is expected for November, with the estimate standing at 195 thousand.
- NHPI: Thursday, 13:30. The New Housing Price Index is an important gauge of activity in the housing sector. The indicator has looked weak and dropped to 0.0% in October, its lowest level in over three years. The markets are expecting an improvement for November, with a estimate of a 0.3% gain.
- BOC Governor Stephen Poloz Speaks: Thursday, 18:05. Poloz will speak at the Canadian Club in Montreal. With the BOC maintaining interest rates at 1.00% last week, analysts will be listening closely for clues as to the Bank’s future monetary policy.
* All times are GMT.
USD/CAD Technical Analysis
USD/CAD opened the week at 1.0623 and dropped to a low of 1.0613. The pair then reversed directions, barreling past the 1.07 line and touching a high of 1.0707, as resistance at 1.0723 (discussed last week) remained intact. The pair closed the week at 1.0633.
Live chart of USD/CAD: [do action=”tradingviews” pair=”USDCAD” interval=”60″/]
Technical lines, from top to bottom:
We begin with resistance at 1.1124. This line has remained intact since July 2009, when the Canadian dollar showed sharp volatility, trading as high as the 1.17 level.
1.0945, which is protecting the key 1.10 level. This line has not been tested since September 2009.
Next is resistance at 1.0853. This line has held firm since May 2010.
1.0723 was a cap in mid-2010, before the US dollar tumbled and dropped all the way into 0.93 territory. With the Canadian dollar losing ground of late, this line was under pressure last week but held firm.
1.0660 was breached for the first time last week since September 2010. It begins the week as weak resistance and could be tested early in the week.
1.0523 was a peak back in November 2011. This line saw some action in early September and is currently in a support role.
1.0446 continues to provide support. This line has some breathing room as the USD/CAD trades at higher levels.
1.0340 had a busy October and is providing strong support. 1.0250 is next. This line has held firm since mid-September.
1.0180 provided support for the pair during March, and saw a lot of activity in the first half of June. It remains a strong support line.
The round number of 1.01 was a trough back in July 2012 and switched to resistance afterwards. The line proved its strength several times in 2013, most recently in mid-May.
Our final support level for now is the round number of parity. This is a clear line which has not been tested since mid-February.
I am bullish on USD/CAD
The Canadian dollar managed to hold its own this week, but remains under pressure as USD/CAD flirted with the 1.07 line last week. Strong US employment numbers have fuelled speculation about a December taper, which is a dollar-positive event.
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.
- USD/CAD (loonie), check out the Canadian dollar.
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