- Current Account: Thursday, 12:30. Canada suffers from a chronic current account deficit, contrary to its occasional surpluses in the narrower monthly trade balance measure. The deficit narrowed to C$8.8 billion in Q4, down from 9.0 billion in the previous release. Will the positive trend continue?
- GDP: Friday, 12:30. Canada is unique in that it publishes Gross Domestic Product figures on a monthly, rather than quarterly basis. The economy was stagnant in February, falling from 0.1% to 0.0%. We now await the March data.
- Raw Materials Price Index: Friday, 12:30. Prices of materials feed into consumer prices, which makes this index an important gauge of consumer inflation. RMPI crashed in March, falling 15.6 percent, as the Covid-19 pandemic has paralyzed the economy and sent inflation sharply lower. Will we see another sharp decline in April?
USD/CAD Technical Analysis
Technical lines from top to bottom:
1.4480 was an important cushion in April 2000. 1.4310 is the next resistance line.
1.4159 (mentioned last week) has some breathing room after USD/CAD recorded losses last week.
1.4019 is a weak resistance level.
1.39 remains relevant and was tested in support during the week.
1.3757 has held in support since mid-March.
1.3661 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. Inflation and employment numbers were soft last week, and a decline in the March GDP could weigh on the Canadian dollar.
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