USD/CAD daily chart with support and resistance lines on it. Click to enlarge:
- Trade Balance: Tuesday, 12:30. Canada continues to register trade deficits. In February, the trade deficit narrowed to C$1.0 billion, down from a $1.5 billion deficit a month earlier. This figure easily beat the estimate of -$2.3 billion. However, the deficit is expected to widen to -2.2 billion in March.
- Ivey PMI: Thursday, 14:00. The Canadian economy is contracting, and this was reflected in the March reading, as the PMI slowed to 26.0, down from 54.1 points. Analysts had projected a reading of 50.1, just above the 50.0 level, which separates contraction from expansion. The April reading stands at 24.3 points.
- Housing Starts: Thursday, 12:15. Housing starts slipped to 195 thousand in March, down from 210 thousand a month earlier. Still, this beat the estimate of 173 thousand. Will we see a rebound in April?
- Employment Report: Friday, 12:30. Analysts had warned that March job numbers would be bad, but the loss of 1.0 million jobs was much worse than the estimate of a loss of 427 thousand. The April forecast is a staggering 5.0 million. Investors will be hoping for an improvement in the April release. The unemployment rate jumped to 7.8%, above the estimate of 7.4%. The reading was sharply higher than the previous reading of 5.6 percent. Analysts are projecting a sharp rise in unemployment, with an estimate of 20.0 percent.
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) has some breathing room in resistance.
1.4019 remains relevant.
The round number of 1.39 has some breathing room in support. 1.3757 is next.
1.3660 is the final support level for now.
I remain bullish on USD/CAD
The outlook for the Canadian dollar remains negative, as economic numbers are reflecting the economic fallout due to Covid-19. The labor market is in terrible shape, and soft employment numbers this week could weigh on the Canadian dollar.
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