USD/CAD daily chart with support and resistance lines on it. Click to enlarge:
- Manufacturing Sales: Monday, 13:30. The manufacturing sector remains weak and manufacturing sales has managed only one gain in the past five readings. In October, the indicator declined by 0.7%, missing the forecast of zero. Will we see a rebound in the November release?
- Inflation: Monday, 13:30. Consumer inflation declined by 0.1% in November, its third decline in the past four months. Core CPI, which excludes the most volatile items which make up CPI, fell by 0.2% in November. We will now receive the December data.
- Wholesale Sales: Wednesday, 13:30. Sales at the wholesale level provide some guidance for consumer spending, a key growth engine of the economy. The indicator fell by 1.1% in November, after a gain of 1.0% a month earlier. The November reading was well off the estimate of -0.4%.
- BoC Rate Decision: Wednesday, 15:00. The Bank of Canada is expected to maintain the benchmark rate at 1.75%, where it has been pegged since October 2018. The tone of the rate statement could have a significant effect on the movement of USD/CAD.
- Retail Sales: Friday, 13:30. Retail Sales have sputtered, with three successive declines. In October, the indicator declined by 1.2%. This was well off the estimate of 0.5%, and marked the sharpest decline since April 2018.
USD/CAD Technical Analysis
Technical lines from top to bottom:
We start with resistance at 1.3445, which has remained intact since June 2019. 1.3385 is next.
The round number of 1.3300 has served in a resistance role since early December. 1.3265 follows.
1.3150 switched to a resistance role in the last week of December.
1.3100 (mentioned last week) remains an immediate resistance line,
1.3048 was relevant throughout the week. Currently, it is a weak resistance line.
1.2916 has provided support since October 2018. 1.2830 is next.
1.2730 has held in support since May 2018.
1.2630 is the final support level for now.
I remain neutral on USD/CAD
After the recent flare-up between the U.S. and Iran, the situation has de-escalated and investor risk appetite has recovered. Canadian consumer data and the BoC rate statement could play a major role in the Canadian dollar’s fortunes this week.
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