GDP, Rate Decision and Ivey PMI: are the market movers this week. Here is an outlook on the major events and an updated technical analysis for USD/CAD. Canadian retail sales dropped by 0.2% in December due to lower auto sales. The low numbers will weigh on the reading for December gross domestic product however analysts still expect annualized fourth quarter growth to be above the Bank of Canada’s 2.3 percent forecast. USD/CAD daily chart with support and resistance lines marked. Click to enlarge: GDP: Monday, 13:30. Canada’s economy grew at a faster pace of 0.4% in the fourth quarter than the central bank projected in the previous month, when it estimated a 2.3 percent annualized pace for the last three months of 2010. The rise in exports and employment prompted investors to raise bets that Carney will accelerate interest rate increases this year. A gain of 0.3% is expected now. Current Account: Monday, 13:30. Canada’s current account deficit widened more than expected in the third quarter totaling C$17.54 billion ($17.20 billion), compared with a revised second-quarter deficit of C$12.98 billion. Analysts forecasted a C$15 billion deficit. Weak US demand for Canadian goods was the major cause for this increase. Canada’s current account deficit is expected to decrease by C$ 9.4 billion. Rate Decision: Tuesday, 14:00. The Bank of Canada held its key interest rate steady at 1% for the third time after raising rates three times between June and September. Policymakers refrain from withdrawing extraordinary stimulus measures in light of the slowdown in the Canadian. Economy. Analysts believe the bank is unlikely to push Canadian rates much above their U.S. equivalents to prevent strengthening the Canadian dollar. Rate is not expected to change. RMPI: Wednesday, 13:30. Canadian raw materials prices soared above expectations in December rising 4.2% while Industrial Product Price Index increased for a fifth straight month, gaining 0.7% since petroleum and metals prices rose sharply. Analysts expected raw materials prices to rise 3.3%. Compared with the same month a year earlier, raw materials prices were up 13.2 percent, following a 6.9 percent increase in November. RMPI is predicted a 3.2% gain while the IPPI is forecasted 0.5% climb. Ivey PMI: Friday, 15:00. Purchasing activity in the Canadian economy decreased unexpectedly in January to 41.4 from 50 in December. This fall below 50 indicates that activity slowed in January. Economists had forecast a reading of 53. This surprising figure does not coincide with the surge in Canadian job growth that month. Purchasing activity is expected to climb to 49.6. All times are GMT. USD/CAD Technical Analysis The Canadian dollar began the week with a retreat – USD/CAD flirted with the 0.9930 line (discussed last week) before dropping back down. In the last hours of the week, the pair fell and breached through the 0.98, closing at 0.9777 – the lowest level since May 2008. Looking down, there aren’t too many lines down there. After the break below 0.98, the next line is 0.97, which also was a support line back in 2008, when commodity prices were soaring. It’s followed by 0.96, which is a minor line – a stepping stone on the way down. The fall to the all time low, back in November 2007, was quite fast – the record was set at 0.9056 – this is still far. Looking up, 0.98 now serves as immediate resistance, after being breached. This was support in 2008. It’s closely followed by 0.9840, which worked as a strong cushion in recent weeks, and now works as resistance. The next line is 0.9930. It was the bottom in 2010 and a pivotal line recently. Above this line, USD/CAD parity is the obvious line of resistance, working in both directions in the past few months. Despite being overridden, it still is of importance. Higher, 1.0060 is the highest level in the past months and is another resistance line – a minor one. It’s followed by 1.0140, which served as resistance in December and also as support in the past. Further above, 1.0280 also served in both directions, taking the role of resistance in the last encounter. 1.0380 was another resistance line, that capped a break more than once, and is strong resistance. I remain bearish on USD/CAD. It’s not just the price of oil which is pushing the pair higher – the Canadian economy is improving, and we’re likely to get more evidence of that now. More oil related reading: Libya Attacked by NATO? Oil Prices Leap, Dollar Falls – An update on the situation of the civil war that rocks oil prices and boosts the Canadian dollar. FX Pairs Mirror Oil Concern – How oil moves all the currencies. Profiting from the oil rally using binary options – an alternative way to ride oil prices. 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. Anat Dror Anat Dror Anat Dror â€“ Senior Writer I conceptualize, design and create multi-lingual websites. Apart from the technical work, my projects usually consist of writing content for these sites in English, French and Hebrew. In the past, I have built, managed and marketed an e-learning center for language studies, including moderating a live community of students. Iâ€™ve also worked as a community organizer Anat's Google Profile View All Post By Anat Dror Expert score 5 Etoro - Best For Beginner & Experts0% Commission and No stamp DutyRegulated by US,UK & International StockCopy Successfull Traders 5 Read Review Open My Free Account Your capital is at risk. Canadian Dollar ForecastMinors share Read Next USD/JPY Outlook – Feb 28- Mar 4 Anat Dror 11 years GDP, Rate Decision and Ivey PMI: are the market movers this week. Here is an outlook on the major events and an updated technical analysis for USD/CAD. Canadian retail sales dropped by 0.2% in December due to lower auto sales. The low numbers will weigh on the reading for December gross domestic product however analysts still expect annualized fourth quarter growth to be above the Bank of Canada's 2.3 percent forecast. USD/CAD daily chart with support and resistance lines marked. Click to enlarge: GDP: Monday, 13:30. 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