USD/CAD Forecast March 29-April 2 – Canada GDP in focus

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USD/CAD posted gains last week. There are five Canadian economic releases in the upcoming week, including GDP. Here is an outlook for the highlights and an updated technical analysis for USD/CAD.  
There were no Canadian economic releases last week.
In the US, Fed Chair Powell and Treasury Secretary Yellen testified before Congress, with the duo reiterating a dovish stance. Yellen spoke about the follow-up stimulus, which she said will be paid by higher taxes. Powell acknowledged that inflation would likely increase but that it would be temporary, and that the Fed would not raise interest rates.
Durable goods disappointed with a sharp decline of 1.1%, its first decline since April. GDP for Q4 of 2020 was revised upwards from 4.1% to 4.3%. As well, unemployment claims fell to 684 thousand, marking a 1-year low.
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USD/CAD daily graph with resistance and support lines on it. Click to enlarge:
  1. GDP: Wednesday, 9:00. Canada publishes GDP reports on a monthly basis. The economy slowed to just 0.1% in November, down from 0.7% beforehand. We now await the December data.
  2. RMPI: Thursday, 7:00. The Raw Materials Price Index rose to 5.7% in January, up from 3.5%, as inflation continues to pick up speed. Will the upswing continue in February?
  3. Building Permits: Thursday, 9:00. Building Permits tends to show sharp swings. The indicator jumped 8.2% in January after a reading of -4.1% beforehand. Will we see another gain in February?
  4. Manufacturing PMI: Thursday, 9:00. The manufacturing sector continues to show expansion and the PMI rose to 54.8 in January, up from 54.4 beforehand. We now await the February release.

Technical lines from top to bottom:

We start with resistance at 1.2869 (mentioned last week).

1.2784 is next.

1.2656 switched to resistance in mid-March, when CAD started a strong rally.

1.2581 is an immediate resistance line.

1.2398 is the first level of support.

1.2290 is the final support level for now.

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I am neutral on USD/CAD

The Canadian dollar has been stabilized after getting a boost from the recent rise in oil prices. The US recovery continues to show signs of strengthening, which is bullish for the US dollar.

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Kenny Fisher - Senior Writer A native of Toronto, Canada, Kenneth worked for seven years in the marketing and trading departments at Bendix, a foreign exchange company in Toronto. Kenneth is also a lawyer, and has extensive experience as an editor and writer.