Retail sales and Annual Budget Release are the major events this week. Here is an outlook on the events ahead and an updated technical analysis of USD/CAD. Canadian wholesale sales rose climbed 1.5% for the sixth time growing at nearly twice the pace forecasted by economists following 0.9% gain in the previous month. This report verifies the fact that Canadian economy is gaining pace. Will the catastrophe in Japan and the uncertainty in the MENA area continue affecting Canada’s pace of recovery? USD/CAD daily chart with support and resistance lines marked. Click to enlarge: Retail Sales: Tuesday, 12:30. Canadian retail sales down shrunk by 0.2% in December thanks to lower auto sales following a strong rise of 1.5% in November. Analysts still expect annualized fourth quarter growth to be at or above the Bank of Canada’s 2.3 percent forecast. Meanwhile Core retail sales excluding auto sales, rose by 0.6% following 0.9% in November less than 0.7% expected. Retail sales are expected to rise 1.1% while Core retail sales are likely to gain 0.8%. Leading Index: Tuesday, 12:30. Canada’s leading indicator rose 0.3 % in January in line with expectations following 0.4% in December thanks to a rise in stock market prices and household spending. Energy and housing rose while manufacturing weakened and the U.S. leading index rose 0.7% in December, suggesting stronger demand Canada’s largest trading partner. Five of the 10 components of the leading indicator posted gains, while four fell, and one was unchanged. A rise of 0.7% is predicted now. Annual Budget Release: Tuesday. Canadian Finance Minister Jim Flaherty intends to present a budget that will balance deficit by 2015 containing measures that will be acceptable also to opposition lawmakers. Flaherty claims the deficit may be smaller than the C$45.4 billion the government previously forecast and that the government would maintain its plan of reducing its deficit by reducing stimulus spending. Mark Carney speaks: Saturday, 14:30. BOC Governor Mark Carney is due to participate in a panel discussion at the Inter-American Development Bank, in Calgary. He may talk about the BOC rate policy and Global economic affects. His words may provide information on future monetary policy. *All times are GMT. USD/CAD Technical Analysis After making a failed attempt to break below the 0.97 line, USD/CAD jumped and broke above the 0.98 line (discussed last week). Attempts to break even higher failed and 0.98 served as a strong cushion. The pair closed the week at 0.9854. Looking up, 0.9930 proved to be a tough line of resistance once again. This is the 2010 low and it now works as strong resistance. It’s followed by the distinctive line up the road of USD/CAD parity, although after it was crossed many times, its significance is reduced. Higher above, 1.0060 is the highest level in the past months and is a minor line of resistance up above parity. Next is 1.0140, which worked as resistance in December and also as support in several occasions beforehand. Even higher, 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. Looking down, 0.98 proved to be a very strong support line. Apart from it’s recent roles in both directions, it was support also back in 2008. It’s followed by another tough support line – 0.97. It also served as support back in 2008, when the situation with commodity prices was similar to today’s. The last line for now is 0.96, which is a rather minor line – a stepping stone on the way down. The pair got closer to this line just now. 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. I remain bearish on USD/CAD. With oil prices rising again on the Western air strikes in Libya, and Canada’s employment situation improving, the Canadian dollar has significant room for gains. 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 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. I've also worked as a community organizer Anat's Google Profile View All Post By Anat Dror Canadian Dollar ForecastMinors share Read Next USD/JPY Outlook – March 21-25 Anat Dror 11 years Retail sales and Annual Budget Release are the major events this week. Here is an outlook on the events ahead and an updated technical analysis of USD/CAD. Canadian wholesale sales rose climbed 1.5% for the sixth time growing at nearly twice the pace forecasted by economists following 0.9% gain in the previous month. This report verifies the fact that Canadian economy is gaining pace. Will the catastrophe in Japan and the uncertainty in the MENA area continue affecting Canada's pace of recovery? USD/CAD daily chart with support and resistance lines marked. Click to enlarge: Retail Sales: Tuesday, 12:30. 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