The Canadian dollar made a false break , and also got stuck in a trading range. This week’s important Canadian releases and the NFP might move the loonie. Here’s an outlook for 4 major Canadian events and a technical analysis for USD/CAD:
This week’s crowded calendar of events and the introduction of the new NFA regulations might set a new direction for the loonie. Contrary to other pairs, the Canadian dollar hasn’t been stuck in a range for a long time. Let’s see the events:
- Building Permits: Despite being an important figure for any economy, Canadian Building Permits went wild in the past few months, going sharply up and sharply down. This time, expectations are different: they’re expected to rise by 1.1%. For comparison, they flew up by 14.8% last month and dived by 5.4% on the month before. These wild moves are typical. It’s published on Thursday at 12:30 GMT.
- Employment Change: Canada’s two employment figures are published on Friday at 11:00 GMT, an hour and a half before the all-important American Non-Farm Payrolls. These hours are critical for the USD/CAD. Employment Change is expected to fall by 20K, renewing the deep dives of previous months. Last time it made a good surprise and fell by only 7.4K. It could print a positive surprise this time as well.
- Unemployment Rate: Published at the same time as the Employment Change, Canadian Unemployment Rate is quite stable. It’s predicted to step up from 8.6% to 8.8%, after surprising and falling last month. As in the previous figure, I also believe that we’ll see a positive surprise. here.
- Ivey PMI: An hour and a half after the NFP, this important Canadian figure will shape the closing chords of USD/CAD for the week. The Richard Ivey School of Business releases this important figure that surveys how business feel about the economy. If expectations are met, Purchasing Managers’ Index will stand on 55.3, finally holding two months in a row above the 50 mark, which indicates economic expansion.
Naturally, the big load of events on the southern side of Canadian border will also impact the USD/CAD pair. Apart from the aforementioned NFP, watch out for the
USD/CAD Technical Analysis
The Canadian Dollar traded in a narrow range this week, from the peaks of 1.0930 on Wednesday to the lows of 1.0750 on Tuesday. At first, the Canadian dollar seemed like it’s breaking the critical 1.08 support line, but it turned out to be a false break. Also Friday’s weak monthly GDP score shattered the hopes of a breakout. Here’s the current graph:
If this week does bring a breach of this line, then the next support line is at 1.0340, which was a strong support line during 2007, and a long-standing resistance line in 2008.
On the upside, a weakening of the Canadian dollar will meet resistance at 1.0930, this week’s high, then at 1.1130 and further north at 1.1470, the old resistance line.
- For a broad view of this week’s events, check out the Forex Weekly Outlook.
- For GBP/USD, here’s the British Pound Outlook..
- For the New Zealand Dollar, read the NZD/USD Outlook.
- For the Aussie, check out the AUD/USD Outlook.