Looking for the latest outlook for this week? Check the full section: USD/CAD Forecast.
The loonie had a good week, until the Canadian employment figures were released. These bad numbers sent USD/CAD back up. Here’s an outlook for the upcoming week, and an updated technical analysis for USD/CAD.
USD/CAD chart with support and resistance lines:
The bad employment figures not only disappointed the markets, but also erased all of last month’s job gains that boosted the Canadian dollar. Let’s review the events this week:
- Housing Starts: Canadian Housing Starts have risen in the past months, and stabilized at 150K. The housing sector was slow to recover, and the hesitant rise shows it. This time, Housing Starts are predicted to rise up to 157K. Published on Monday at 13:!5 GMT.
- NHPI: The second housing figure for the week is published on Thursday at 13:30. After many months of downfall, the New Housing Price Index has been positive in recent months, rising 0.1% last month. This housing indicator is also important for the loonie. It’s expected to rise by 0.2% this time.
- Trade Balance: 5 months of consecutive trade deficit will probably be followed by a sixth one. The fall in the prices of commodities has hurt the Canadian exports, and the deficit has deepened to 2 billion C$. It’s expected to ease this time, and show a deficit of 1.5 billion. Publishe on Friday at 13:30 GMT, together with the American Trade Balance. This double feature event makes the release time very sensitive for USD/CAD.
USD/CAD Technical Analysis
The Canadian dollar started the week with some nice strength: USD/CAD fell as low as 1.0594, flirting with the support line. The disappointing job figures in Canada on Friday erased the gains, and USD/CAD ended the week at 1.0750, a relatively small drop.
I’ve updated some of the support and resistance lines from last week’s USD/CAD outlook. Looking down, this week’s low area of 1.06 is the first support line. It was also a support line in September.
Further below, 1.02 is this year’s bottom for USD/CAD and serves now a strong support line. Further below, parity, 1:1 is a huge support line. This level was last seen last summer.
Looking up, a strengthening greenback will find resistance at 1.0850, the peak of the last weeks. Further above, 1.1130 is a major resistance line, that wasn’t reached since July, and was tested many times.
Following last week’s change, I remain neutral on the pair. The negative change in the Canadian dollar’s direction was done also by the falling GDP. Now it was confirmed by this week’s bad employment figures.
- For a broad view of all the week’s major event in all currencies, read the forex weekly outlook.
- For the Euro, read the EUR USD Forecast.
- For GBP/USD, look into the British Pound forecast.
- For the Australian dollar, read the AUD/USD forecast.
- For USD/CAD, check out the Canadian dollar forecast.
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