- Inflation: Wednesday, 12:30. Consumer inflation fell by 0.6% in March, its sharpest decline since December 2014. Core CPI slowed to 0.1%, down from 0.7% a month earlier. We now await the April data.
- ADP Non-Farm Employment Change: Thursday, 12:30. The March release was a disaster, with a staggering drop of 177.3 thousand. Will we see an improvement in the April release?
- Retail Sales: Friday, 12:30. Retail sales is the primary gauge of consumer spending. In February, the headline figure came in at a flat 0.0%, shy of the forecast of 0.3%. The core read edged lower to 0.3%, matching the estimate. Soft numbers for April could weigh on the Canadian dollar.
USD/CAD Technical Analysis
Technical lines from top to bottom:
1.4480 was an important cushion in April 2000. 1.4310 is next.
1.4159 (mentioned last week) was under pressure last week as USD/CAD posted strong gains.
1.4019 is providing support.
The round number of 1.39 has some breathing room in support.
1.3757 is the final support line for now.
I remain bullish on USD/CAD
The outlook for the Canadian dollar remains negative in the near term. Economic conditions in Canada remain very weak due to Covid-19 and if this week’s inflation and retail sales miss expectations, USD/CAD could gain ground.
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