Dollar/CAD changed course and fell sharply as oil prices surged and trade tensions fell. Can it last? The jobs report is the main event on the Canadian agenda, but trade concerns remain central. Here are the highlights and an updated technical analysis for USD/CAD. The price of oil continued its upward march. OPEC’s confusing decision and Trump’s attempt to ban all Iranian crude exports were joined by a sharp drop in US oil inventories. Petrol prices jumped and the Canadian dollar was bid. More importantly, Trump went for a softer approach on curbing Chinese investments in the US, thus allowing markets to recover. The ensuing risk-off sentiment helped the C$. To top it off, Canadian GDP beat expectations with 0.1% in April, ending the week on a positive note. Nevertheless, Canada announced the imposition of retaliatory tariffs against the US over the weekend. The announcement, made by Chrystia Freeland, may trigger countermeasures from the US. Update: Oil prices extended their gains and reached $75 on WTI at some point. Together with a calmer mood on the trade front, the Canadian $ got some relief. Things will get busier on Friday. The Canadian Dollar enjoyed the better mood in markets and also Trump’s focus on Iran. Forbidding Iran to export oil raised oil prices, canada’s primary export. In addition, German Chancellor Merkel’s comments about opening the door reducing EU tariffs on cars helped improve the global mood and also assisted the C$.Markets reacted with a shrug to the US tariffs on China and the counter-duties by the world’s second-largest economy. Join a live coverage of the US NFP. [do action=”autoupdate” tag=”EURUSDUpdate”/]USD/CAD daily graph with support and resistance lines on it. Click to enlarge: Manufacturing PMI: Tuesday, 13:30. Markit’s purchasing managers’ index for the manufacturing sector stood at 56.2 points back in May. A similar number may be seen now. A drop, due to trade concerns, may weigh on the loonie. US tariffs on China come into effect: Friday. The US announced tariffs on Chinese goods worth $50 billion a few weeks ago, but they will come into effect on July 6th. China announced it would retaliate. The time between the announcement and the actual imposition was seen as allowing for negotiations to proceed. However, there have been no meaningful movements in defusing the situation. If a last-minute deal is struck, a risk-on atmosphere could sink the yen and also weigh on the US Dollar, especially against commodity currencies such as the Canadian Dollar. If mutual tariffs are imposed and the US announces a counter-retaliation to Chinese tariffs, the greenback could suffer and the loonie could take advantage of it. The jobs report Friday, 12:30. Canada suffered two consecutive months of falls in jobs, with a loss of 7.5K positions in May. A rebound is likely now. The unemployment is projected to remain at 5.8%. It is important to note that wage growth is becoming more important in Canada. The 3.9% y/y rise in May supported the loonie despite the disappointing drop in jobs. Trade Balance: Friday, 12:30. Canada had a trade balance deficit of 1.9 billion in April, a narrower than expected number. Canada could see a broader deficit in May. The US tariffs came into effect only in June and will not be reflected in the current figures. Ivey PMI: Friday, 14:00. The Richard Ivey School of Business has reported an impressive score in its forward-looking survey for May: 62.5 points. A small drop to 63.2 is expected now, but the growing row with the US could result in a worse outcome. *All times are GMT USD/CAD Technical Analysis Dollar/CAD turned sharply south and stopped only very close to the 1.3125 level mentioned last week. Technical lines from top to bottom: 1.3795 capped the pair last April. 1.3560 capped the pair back in May 2017 and is a high point. 1.3385 was the high point on two occasions in late June. 1.3350 follows close by after serving in both directions in July 2017. 1.3255 was a line of support when the pair traded on high ground in late June. 1.3125 is the high point for 2018 until it was broken. 1.3065 was the high point in May and also earlier in the year. 1.30 is a round number that is eyed by many. 1.2920 capped the pair in late April and early May as well. 1.2820 served as support in early May. I remain bullish on USD/CAD Despite the correction and the improving economy, the high dependence on the US could result in a downfall of the Canadian Dollar. Our latest podcast is titled Festive Fed, Dovish Draghi, and a global trade war Follow us on Sticher or iTunes Further reading: EUR/USD forecast – for everything related to the euro. GBP/USD forecast – Pound/dollar predictions USD/JPY forecast – analysis for dollar/yen AUD/USD forecast – projections for the Aussie dollar. Forex weekly forecast – Outlook for the major events of the week. Safe trading! Yohay Elam Yohay Elam Yohay Elam: Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I've accumulated. After taking a short course about forex. Like many forex traders, I've earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I've worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts. Yohay's Google Profile View All Post By Yohay Elam Canadian Dollar ForecastMinors share Read Next Non-Farm Payrolls live coverage Yohay Elam 4 years Dollar/CAD changed course and fell sharply as oil prices surged and trade tensions fell. Can it last? The jobs report is the main event on the Canadian agenda, but trade concerns remain central. Here are the highlights and an updated technical analysis for USD/CAD. The price of oil continued its upward march. OPEC's confusing decision and Trump's attempt to ban all Iranian crude exports were joined by a sharp drop in US oil inventories. Petrol prices jumped and the Canadian dollar was bid. 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