Dollar/CAD spent most of the week trading in narrow ranges as no news on the trade front helped the loonie stabilize. The upcoming week features only one Canadian event, leaving the market mood as the primary driver of the pair. Here are the highlights and an updated technical analysis for USD/CAD.
Canada’s Foreign Securities Purchases fell somewhat short of expectations but manufacturing sales were on the rise. Oil prices remained on the back foot, putting some pressure on the C$. In the US, Fed Chair Jerome Powell expressed confidence in the US economy and tried not to talk about trade relations, assisting the greenback. US retail sales were marginally better than expected.Updates:
USD/CAD daily chart with support and resistance lines on it. Click to enlarge:
- Wholesale Sales: Monday, 12:30. The volume of sales at the wholesale level serves as an indication of future retail sales. A modest increase of 0.1% was seen in April and we may see a better outcome this time.
*All times are GMT
USD/CAD Technical Analysis
Dollar/CAD drifted in range, challenging the 1.3255 level seen last week, eventually returning to the range.
Technical lines from top to bottom:
1.3795 held the pair down in April. 1.3560 capped the pair back in May 2017 and is a high point.
1.3385 was the peak 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. 1.3220 served as resistance for the pair in mid-July.
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 backwind from the BOC, the menace of deteriorating trade relations with the US will likely weigh on the economy and the Canadian dollar.
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