Many important events await traders of the Canadian dollar with Employment and Housing Data, Ivey PMI and Trade Balance. Here’s an outlook for the 7 events that will rock the loonie this week, and an updated technical analysis for USD/CAD. The Bank of Canada provided a very hawkish outlook for the future, and this boosted the Canadian dollar. On the other hand, current account was very bad and outweighed a good GDP number. Stephen Harper Canadian Prime Minister announced last week his plans to attract foreign investors and restrain spending in order to protect the Canadian market from the weakening US economy. Will the setback in US economy seriously affect Canadian market? USD/CAD chart with support and resistance lines marked on it: Building Permits: Monday, 13:30. The value of building permits soared on March rising by 17.2% from 9.8% gain in February; this is the highest rise in 4 years. Economists predicted a drop of 1.5% lead by significant expansion in the residential sector. A small increase of 2.3% is expected now. Ivey PMI: Monday, 15:00. Canada’s Ivey Purchasing Managers Index dropped to 57.7 in April from 73.2 in the previous month below expectations of 67.1. A small increase to 58.4 is forecasted. Housing Starts: Wednesday, 13:15. Canadian housing starts plunged unexpectedly to 179,000 in April due to the drop in the condominium sector. Canada’s strong housing sector is expected to drop further following the government’s decision to impose tighter mortgage rules. An increase of 184,000 in housing starts is predicted. Trade Balance: Thursday, 13:30. Canada’s trade surplus rose to C$627 million in March following two months of drops with increases in exports overshadowing imports. The rise in surplus was close to predictions of C$500 million surplus. Following this rise, manufacturers announced their plans to increase productivity. A decrease to C$300 million is forecasted now. NHPI: Thursday, 13:30. New Housing Price Index (NHPI) was flat in March after a 0.4% gain in February. On a yearly base NHPI increased 1.9% in March following a 2.1% gain in February. An increase of 0.6% is expected. Employment Data: Friday, 12:00. Canada’s economy produced more jobs than expected in April totaling 58,300 new positions. This surge more than doubled predictions of 22,500 job additions and raising expectations for a good growth rate in the second quarter with interest rate hikes along the year. Unemployment rate dropped from 7.7 in March to 7.6 in April indicating a strong employment conditions. Canadian economy is expected to add 25,300 new jobs while Unemployment rate is not predicted to change. Labor Productivity: Friday, 13:30. Canada’s productivity continued to increase at the end of 2010 rising 0.5% following 0.4% gain in the previous quarter. Better labour productivity with weaker unit labor boosted economic growth aiding businesses to become more competitive. The same rise is expected now. *All times are GMT. USD/CAD Technical Analysis At the beginning of the week, the Canadian dollar showed a lot of strength: USD/CAD pierced through the 0.9750 line (discussed last week) and found support around the 0.9667 line. It later pushed back up with 0.9750 turning into support once again. Technical lines, from top to bottom: 1.02 is a very far line in the distance, but a rise could make it relevant. Still distant and minor resistance appears above parity, at 1.0060. This was the highest level in 2011. The very round number of USD/CAD parity is the obvious line below, although it isn’t too strong. Under parity, we have two close lines – 0.9977, which was a trough in 2010, was also tested at the beginning of March and proved to be significant. The 2009 low of 0.9930 is just beneath, now weaker than earlier. 0.9816 capped the pair twice in two weeks ago. This double top makes it an important line of resistance now, even though it was temporarily broken towards the end of the week. 0.9750 was a very distinctive line in the past week, separating ranges in a great way. 0.9667 was a cushion in March and later worked as resistance. This line provided support also now, and has a more important role now. 0.96 is a minor support line that played a role recently. More important support is at 0.9520 – it worked as support and also as minor resistance during April. 0.9450 was a double bottom just now and is very important – it’s the new 2011 low. Below this line, we have lines last seen in 2007 – 0.92 is notable, as well as the historic low of 0.9056. I remain bearish on USD/CAD. With a growing economy the stable price of oil and prospects for a rate hike, the Canadian dollar has reasons to rise. Risk comes from the weaker US economy, as seen in the Non-Farm Payrolls – a weaker US economy is bad for Canada as well. When oil prices fell earlier in the week, the loonie fell with it. See the Elliott Wave analysis regarding the correlation between the instruments. 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/CHF Outlook June 6-10 Yohay Elam 11 years Many important events await traders of the Canadian dollar with Employment and Housing Data, Ivey PMI and Trade Balance. Here's an outlook for the 7 events that will rock the loonie this week, and an updated technical analysis for USD/CAD. The Bank of Canada provided a very hawkish outlook for the future, and this boosted the Canadian dollar. On the other hand, current account was very bad and outweighed a good GDP number. 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