- Wholesale Sales: Monday, 13:30. The indicator has pointed to a decline in sales in three of the past four releases. The November release fell by 1.2%, much weaker than the estimate of -0.2%. The estimate for December stands at 0.5%.
- Corporate Profits: Tuesday, 13:30. Corporate profits is a useful gauge of the strength of the corporate sector. The indicator posted a slight gain of 0.4% in Q3, down sharply from 5.2% in Q2. We now await the fourth-quarter release.
- Current Account: Thursday, 13:30. Canada posts current account deficits on a regular basis. In December, the deficit jumped to C$9.9 billion, above the estimate of C$9.5 billion. This was up sharply from the November deficit of C$6.4 billion. Will we see an improvement in the December release?
- GDP: Friday, 13:30. Canada’s GDP reports continue to hover around the zero level, pointing to weak economic growth. In November, the economy grew by 0.1%, above the forecast of 0.0%. The December estimate is unchanged at 0.1%.
- Raw Materials Price Index: Friday, 13:30. This key inflation indicator accelerated for a second straight month, climbing to 2.8% in December, well above the estimate of 0.7%. We now await the January release.
USD/CAD Technical Analysis
Technical lines from top to bottom:
We start with resistance at 1.3660, which held since December 2018. 1.3550 is next.
1.3420 has remained intact since June 2019.
1.3330 has served in a resistance role since early December.
1.3265 remained relevent throughout the week. It is currently a weak resistance line.
1.3150 is providing support.
1.3100 (mentioned last week) is the next support level.
1.3048 is protecting the symbolic 1.3000 level.
1.2950 is the final support level for now.
I remain bullish on USD/CAD
The coronavirus has dampened risk appetite and sent oil prices lower, so the Canadian currency will likely remain under pressure.
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