USD/CAD Technical Analysis, Canadian dollar forecast ► review of the major events that will move the Canadian dollar (loonie) during the upcoming week. Here is some general information. Scroll down for the latest USD/CAD outlook
The Canadian dollar, aka “the loonie” (for the loon on the back of the coin) is a commodity currency due to Canada’s chief export: oil. This also makes it a risk currency: rising not only with crude oil but also with stocks and falling with them. However, the C$ also depends heavily on US demand, as the southern neighbor is the biggest trading partner.
Dollar/CAD tends to react relatively slowly to significant Canadian data. This allows a better level playing field for retail traders to jump into the trade. Even the Canadian jobs report tends to result in a relatively long move.
$/C$ technical trading is OK: not tough and choppy but neither fully respecting lines of support and resistance.
Dollar/CAD Recent Moves
Since the big fall in oil prices in late 2014, Dollar/CAD is trading at higher levels, and the Bank of Canada cut interest rates twice. The new government led by Justin Trudeau enacted fiscal stimulus, a rarity in the Western world. This takes some of the burdens off the shoulders of Stephen Poloz, the BOC governor.
The next move by the Federal Reserve, BOC actions, oil prices and the impact of government spending will all move the currency. Also, watch out for the worries about elevated housing prices in Vancouver and also in Toronto.
USD/CAD is not moving too far from the 1.30 level, down from the 1.47 peak but way above the near-parity levels.
Latest weekly Canadian dollar forecast