USD/CAD Forecast Dec. 28-Jan. 1 2020 – No stimulus package for Christmas

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USD/CAD moved higher and recorded its best week since October. There are no Canadian events in the upcoming week. Here is an outlook for the highlights and an updated technical analysis for USD/CAD.  
Canada’s New Housing Price Index slowed for a second straight month, falling to 0.6%. This fell short of the estimate of 0.9%. After hitting 6.5% in June, GDP has been slowing and came in at just 0.4% in October. This edged above the consensus estimate of 0.3%. Has the Canadian economy run out of steam?

Congress approved a massive stimulus package, but President Trump has thrown a monkey wrench in the process, saying he will veto the bill unless stimulus payments are substantially increased.

US Final GDP for the third quarter was revised upwards to 33.4%, up from 33.1%. Durable goods orders weakened in November, Headline durables dropped from 1.3% to 0.9%, while the core reading slumped to 0.4%, down from 1.3%. Consumer numbers worsened, as Personal Income came in at -1.1% and Personal Spending declined by 0.4%, its first decline in seven months. Unemployment Claims dropped sharply to 803 thousand, well below the estimate of 882 thousand.

USD/CAD daily graph with resistance and support lines on it. Click to enlarge:

Technical lines from top to bottom

We start with resistance at 1.3101, an important monthly line.

1.2938 switched to resistance at the start of December, when USD/CAD started its slide.

1.2831 is the first line of support.

1.2768 (mentioned last week)  is next.

1.2642 has held in support since April 1.

1.2578 is the final support level for now.

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I remain bearish on USD/CAD

The US dollar remains under pressure, but Christmas week will be subdued, so any losses by the greenback should be light.

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Kenny Fisher - Senior Writer A native of Toronto, Canada, Kenneth worked for seven years in the marketing and trading departments at Bendix, a foreign exchange company in Toronto. Kenneth is also a lawyer, and has extensive experience as an editor and writer.

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