- Current Account: Thursday, 12:30. Canada’s current account deficit ballooned to C$17.3 billion in the first quarter, the highest in four quarters. Still, the reading was below the estimate of C$18.1 billion. We will now receive the reading for Q2.
- GDP: Friday, 12:30. Canada’s economy has been slowing and dropped to 0.2% in May. If GDP continues to struggle, the BoC may have to consider a rate cut to stimulate economic activity. The estimate for June is 0.1%.
- RMPI: Friday, 12:30. The Raw Materials Price Index has declined for two successive months, pointing to weakness in inflation. The June reading of -5.9% was the sharpest monthly decline in 2019. July is expected to bring better news, with an estimate of 1.6%.
* All times are GMT
USD/CAD Technical Analysis
Technical lines from top to bottom:
We start with resistance at 1.3665, which was the high point in 2018. 1.3565 is next.
1.3445 has held in resistance since the first week of June. This is followed by 1.3385.
1.3350 has held steady since mid-June.
1.3265 remained relevant this week. It starts the new trading week as a weak support level.
1.3175 is the next line of support.
1.3125 (mentioned last week) has held in support since the end of August. 1.3048 follows.
1.2916 is the final support level for now.
I remain bullish on USD/CAD
The Canadian dollar has not registered a winning week since early July, and the headwinds could continue for minor currencies like the loonie. Fears of a recession in the U.S. have dampened risk appetite, and the ongoing U.S.-China trade war will not help matters;
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