USD/CAD daily chart with support and resistance lines on it. Click to enlarge:
- Foreign Securities Purchases: Monday, 13:30. Assets purchased by foreigners dipped to C$4.76 billion in September, but this beat the estimate of 4.22 billion. The forecast for October stands at 5.22 billion.
- Manufacturing Sales: Tuesday, 13:30. Manufacturing sales have been sputtering, with three declines in the past four months. The indicator is expected to rebound in October, with an estimate of +0.2%.
- Inflation: Wednesday, 13:30. CPI improved to 0.2% in October, after back-to-back declines. Will we see another gain in the November release?
- ADP Nonfarm Employment Change: Thursday, 13:30. This employment indicator has pointed to strong job creation in recent months, but faltered in October, with a weak reading of -22.6 thousand. Will we see an improvement in November?
- Retail Sales: Friday, 13:30. Retail sales reports were mixed in September. The headline release came in at -0.1% for a second straight month. Core retail sales was stronger, with a gain of 0.2% in September.
USD/CAD Technical Analysis
Technical lines from top to bottom:
We start with resistance at 1.3550.
1.3445 has remained intact since the first week of June. 1.3385 is next.
The round number of 1.3300 continues to be a resistance line.
1.3265 remains a relevant line. It has some breathing room in resistance.
1.3150 is an immediate support line.
1.3100 (mentioned last week) has held in support since the end of October, when USD/CAD started an extensive rally.
1.3048 is protecting the round number of 1.3000, which has psychological significance.
1.2916 was last tested in October 2018.
1.2830 is the final support level for now.
I am bearish on USD/CAD
The Canadian dollar posted gains for a third straight week and the momentum could continue. The U.S. and China are expected to sign a ‘Phase 1’, limited trade agreement, which is expected to terminate or suspend tariffs between the world’s two largest economies. The agreement will likely raise investor appetite, which could boost minor currencies like the Canadian dollar.
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