- Bank of Canada Rate Decision: Wednesday, 15:00. The BoC is expected to maintain the Overnight Rate at 0.25%, where it has been pegged since March. A hawkish rate statement would be bullish for the Canadian dollar.
- Employment Report: Friday, 13:30. Canada’s labor market has sagged lately, and the January release of -212.8 thousand was a disaster. Unemployment rose to 9.4%, up sharply from 8.6%. We now await the February data.
- Wholesale Sales: Friday, 13:30. Wholesale Sales slipped by 1.3% in December but is expected to rebound in January, with an estimate of 0.4%.
Technical lines from top to bottom:
We start at 1.2911, which was last tested in resistance in mid-December.
1.2827 is next.
1.2750 has some breathing room in resistance after sharp losses by the pair last week.
1.2620 is an immediate support level.
1.2459 (mentioned last week) has held in support since February 2018.
1.2373 is the final support level for now.
I am bearish on USD/CAD
The massive Biden stimulus program was approved by the Senate and will become law shortly, With a huge number of dollars being injected into the economy, the US dollar could be under pressure. As well, with the Covid vaccine programs continuing, risk sentiment remains solid, which is bullish for the Canadian dollar.
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