The Canadian dollar was unchanged this week, as USD/CAD closed just above the 1.31 line. There are only 3 events this week, highlighted by Manufacturing Sales. Here is an outlook on the major market-movers and an updated technical analysis for USD/CAD.
Solid Canadian employment and manufacturing numbers helped the loonie hold its own last week. In the US, NFP was slightly below expectations, which means the guessing game about the timing of rate hike by the Fed will continue.
[do action=”autoupdate” tag=”USDCADUpdate”/]USD/CAD daily chart with support and resistance lines on it. Click to enlarge:
- Housing Starts: Tuesday, 12:15. Housing Starts provides a snapshot of the level of activity in the housing industry. The indicator edged higher in June, with a reading of 203 thousand. This was much higher than the forecast of 191 thousand. The estimate for the July report stands at 205 thousand.
- NHPI: Thursday, 12:30. The housing inflation index continues to improve, and posted a gain of 0.2% in May. The markets are anticipating a gain of 0.3% in June.
- Manufacturing Sales: Friday, 12:30. This is a key economic indicator and should be treated by traders as market-mover. The indicator has struggled in 2015 and produced a weak gain of 0.1% in May. The markets are hoping for a strong turnaround in June, with an estimate of 2.1%.
* All times are GMT.
USD/CAD Technical Analysis
USD/CAD opened the week at 1.3124 and climbed to a high of 1.3213. The pair then reversed directions, slipping to a low of 1.3042, testing support at 1.3063 (discussed last week). USD/CAD managed to recover late in the week and closed at 1.3113.
Live chart of USD/CAD: [do action=”tradingviews” pair=”USDCAD” interval=”60″/]
Technical lines, from top to bottom
We begin with resistance at 1.3587.
1.3443 was a cap in December 2003.
1.3346 has held firm since August 2004.
1.3165 is under pressure and is a weak resistance line.
1.3063 was tested in support. It is protecting the symbolic line of 1.30.
1.2924 held firm and has strengthened as a support line.
1.2798 is the next line of support.
1.2673 marked the start of the current greenback rally which has seen the pair push close to the 1.31 level.
1.2541 is the final support level for now.
I am bullish on USD/CAD
The US economy has shown improvement in Q2, which could fuel speculation about a September rate hike, and this could send the greenback to higher levels.
In our latest podcast, we ask: Will they or won’t they? We talk about the Fed and also falling oil and silver.
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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