Canadian Dollar – December 27-31

No events are due in Canada this week, so the loonie will rock mostly on external news and technicals. Here’s an outlook.

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

Let’s start:

USD/CAD  Technical  Analysis

The Canadian dollar gradually  strengthened during the week, and eventually closed around 1.0075, that was mentioned  last week.

Looking down, minor support is found at 1.0075, just below the current close. It served as support a few weeks ago. Below, USD/CAD parity proved to be strong support, and it’s a very round number.

Just below, 0.9975  cushioned the pair’s fall in the past two months and now works as support. It’s immediately followed by the year-to-date low of 0.9930.

Further lines below were last seen in 2008: 0.98 and 0.97. Reaching these levels depends a lot on  oil prices.

Looking up, 1.0140 is now a weak line, after not working as a significant line in the past week. Higher, 1.0280 remains a strong line of resistance, which hasn’t been broken in quite a while.

Higher, the 1.0380 line is a very strong resistance line after stopping USD/CAD from  rising a few times in recent months, and is still far. The next line is    1.05 which capped the pair twice during the summer and is the next minor line of resistance.

Even higher, the strong 1.0680 worked as resistance in July and in August, for more than one day in each attempt to break higher.  The next levels are still far – 1.0750 was a swing high during May and also the limit  of a long-term range in 2009. The last line is, 1.0850, which was also a swing high back then.

I remain neutral on USD/CAD.

The Chinese rate hike might hurt the Canadian dollar and balance the Canadian fundamentals, which are OK.

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/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 New Zealand dollar (kiwi), read the  NZD forecast.
• For USD/CAD (loonie), check out the  Canadian dollar.

Want to see what other traders are doing in real accounts? Check out Currensee. It’s free..