USD/CAD was almost unchanged over the week. There are four releases in the upcoming week, including Employment Change. Here is an outlook at the highlights and an updated technical analysis for USD/CAD.
Canada’s GDP bounced back nicely in June, with a gain of 4.5%. This followed a dismal decline of 11.6% beforehand. Raw Materials Price Index slowed to 7.5%, down from 16.4%. Still, this beat the estimate of 7.0%.
- Manufacturing PMI: Tuesday, 13:30. The manufacturing sector continues to contract, as the manufacturing PMI has been below the 50-level since February. However, the PMI improved nicely in July, rising from 40.6 to 47.8. Will we break into expansion territory in the upcoming release?
- Trade Balance: Wednesday, 12:30. Canada’s trade deficit narrowed in May to C$0.7 billion, down from C$3.3 billion beforehand. We now await the June data.
- Employment Report: Friday, 12:30. The economy created almost a million jobs in June, with a reading of 952.9 thousand. This was up sharply from 289.6 thousand in May. Will we see another strong gain in the July release?
- Ivey PMI: Friday, 14:00. Business conditions jumped to 58.2 in June, up sharply from 39.1 a month earlier. A reading over 50.0 indicates expansion. Will the upswing continue in July?
USD/CAD Technical Analysis
Technical lines from top to bottom:
We start with resistance at 1.3757.
1.3661 (mentioned last week) is next.
1.3550 switched to resistance last week, when USD/CAD posted strong losses.
1.3420 was tested throughout the week. It is an immediate resistance line.
1.3330 is providing support.
1.3265 is next.
1.3078 is the final support level for now.
I am neutral on USD/CAD
The Canadian dollar has taken advantage of broad US dollar weakness, but Canada’s economy is very dependent on a recovery south of the border, as well as the price of oil, which has been soft. The strength of the June employment report could play a key factor in the fortune of USD/CAD this week.
- 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.