The Canadian dollar had an outstanding week, climbing 1.99 percent. This was its best weekly performance since June. There are no Canadian events this week, so US data will have a magnified effect on the movement of USD/CAD.
Canada Manufacturing PMI continued to show expansion, with a reading of 55.5 points. The economy created just 83.6 thousand jobs, down from 378.2 thousand beforehand. The unemployment rate edged down to 8.9%, down from 9.0 percent.
In the US, ISM Manufacturing PMI was stronger than expected. The index climbed from 55.4 to 59.3, above the forecast of 55.6 points. The Federal Reserve didn’t make any changes, but hinted at more easing in December. US nonfarm payrolls slowed to 638 thousand, but exceeded the estimate of 595 thousand. Wage growth remained steady at 0.1%, while the unemployment rate dropped from sharply to 6.9%, down from 7.9%. The Ivey PMI improved to 54.5, up from 54.3 points.
USD/CAD daily chart with support and resistance lines on it. Click to enlarge:
USD/CAD Technical Analysis
Technical lines from top to bottom:
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With USD/CAD recording strong losses last week, we start at lower levels:
1.3330 (mentioned last week) has some breathing room in resistance.
1.3260 is next.
1.3137 has switched to a resistance role after strong losses by USD/CAD last week.
1.3014 is a weak support level.
1.2936 has held in support since October 2018.
1.2844 is next.
1.2730 is the final support level for now.
I am neutral on USD/CAD
With the US election results finally in, USD/CAD will likely settle down after last week’s huge downward move. It’s a quiet week on the fundamental front, although an unexpected reading from US consumer inflation could shake up the pair.
Further reading:
- EUR/USD forecast – for everything related to the euro.
- GBP/USD forecast – Pound/dollar projections.
- AUD/USD forecast – analysis for the Aussie dollar.
- USD/CAD forecast – Canadian dollar predictions.
- Forex+ weekly forecast – Outlook for the major events of the week.
Safe trading!
