USD/CAD daily chart with support and resistance lines on it. Click to enlarge:
- Foreign Securities Purchases: Monday, 12:30. The indicator declined by C$1.49 billion in March, well off the estimate of C$11.55 billion. This marked the first decline in three months. Will we see a rebound in April?
- Manufacturing Sales: Tuesday, 12:30. This key manufacturing event jumped 2.1% in March, well above the estimate of 1.5%. The April estimate stands at 0.6%.
- CPI: Wednesday, 12:30. CPI is the primary gauge of consumer inflation. The indicator slowed to 0.4% in April, matching the forecast. The markets are braced for a weak gain of 0.1%. Core CPI, which excludes the most volatile items that are included in CPI, fell to zero in April. Another soft reading is expected.
- ADP Nonfarm Employment Change: Thursday, 12:30. Canada’s job creation numbers have been strong, and the ADP nonfarm payrolls posted an excellent gain of 61.7 thousand in May. Another strong reading would be a sign that the labor market is in good shape.
- Retail Sales Data: Friday, 12:30. Retail sales reports improved in March. Retail sales climbed 1.1%, while the core release jumped 1.7%, its strongest gain in over two years. April is projected to show weaker consumer spending. The estimate for retail sales is 0.3% and for core retail sales 0.6%.
* All times are GMT
USD/CAD Technical Analysis
Technical lines from top to bottom:
With USD/CAD posting strong gains, we start at higher levels:
1.3915 was an important resistance line back in February 2016.
1.3757 has held in resistance since May 2017.
1.3660 was the high point for USD/CAD in December.
1.3547 capped USD/CAD in June 2017. 1.3445 (mentioned last week) has weakened in resistance.
The pair broke through resistance at 1.3385 late in the week. Close by is 1.3350.
1.3265 has some breathing room in support after strong gains by USD/CAD last week.
1.3225 has held in support since early March. 1.3175 was a swing low in late November.
1.3125 was a low point earlier that month.
1.3048 has provided support since early November.
I remain bullish on USD/CAD
Geopolitical tensions in the Middle East and the ongoing trade war between the U.S. and China are weighing on risk appetite, which makes minor currencies like the loonie less attractive to investors.
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