USD/CAD daily chart with support and resistance lines on it. Click to enlarge:
- Wholesale Sales: Tuesday, 12:30. The indicator tends to show strong swings, making accurate predictions a tricky task. In March, wholesale sales jumped 1.4%, crushing the estimate of 0.4%.
- GDP: Friday, 12:30. Canada’s GDP reports are released monthly. In March, the economy rebounded with a gain of 0.5%, above the estimate of 0.3%. GDP is expected to slow to 0.2% in April.
- RMPI: Tuesday, 12:30. The Raw Materials Price Index is an important inflation index. In April, the index jumped 5.6%, its strongest monthly gain since December 2016. Will we see another strong gain in May?
- BoC Business Outlook Survey: Friday, 14:30. This well-respected survey looks at a wide range of business conditions, including spending and hiring expectations. It should be treated as a market-mover.
* All times are GMT
USD/CAD Technical Analysis
Technical lines from top to bottom:
With USD/CAD posting sharp losses, we start at lower levels:
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.
USD/CAD broke below 1.3225, which had held in support since early March.
1.3175 was a swing low in late November. This support line was breached late in the week.
1.3125 was a low point earlier in November.
1.3048 has provided support since late October. 1.2916 is next.
1.2831 is the final support level for now.
I am neutral on USD/CAD
The Canadian dollar has showed strong movement in the month of June. What’s next for the currency? The situation in the Persian Gulf remains tense, and a wrong move by Iran or the U.S. could lead to an armed confrontation, which would likely sap risk appetite and hurt the Canadian dollar. On the other hand, the clear message from the Fed that a rate cut is on the way makes the U.S. dollar less attractive to investors.
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