USD/CAD Forecast Nov. 16-20 – US dollar recovers some election losses

0

USD/CAD reversed directions last week, rising 0.75%. There are six Canadian events this week, including inflation and retail sales.

There were no Canadian economic releases last week. In the US, consumer inflation softened, as the headline and core readings both fell to 0.0%, down from 0.2% beforehand. There was positive news on the employment front, as unemployment claims fell to 709 thousand, down from 751 thousand in the previous release. The week wrapped up with UoM Consumer Sentiment, which fell from 81.2 to 77.0, its lowest level in three months.

USD/CAD daily chart with support and resistance lines on it. Click to enlarge:

  1. Manufacturing Sales: Monday, 13:30. After three straight gains, the indicator fell 2.0% in August. The forecast for September stands at 1.7%.
  2. Housing Starts: Tuesday, 13:15. Housing Starts slowed to 209 thousand in September, down sharply from 262 thousand beforehand. Will we see an improvement in the October data?
  3. Foreign Securities Purchases: Tuesday, 13:30. The indicator rebounded in August with a reading of C$15.51 billion, after two declines. This crushed the forecast of C$3.01 billion. Will the upswing continue in September?
  4. Inflation Report: Wednesday, 13:30. Inflation remains at very low levels, reflective of subdued economic activity. The headline reading has not posted a gain in four months. Trimmed CPI, which excludes the most volatile items in the headline release, edged up to 1.8% in September. We now await the October releases.
  5. ADP Non-Farm Employment Change: Thursday, 13:30. This employment indicator has recorded two straight declines of more than -200 thousand, pointing to weakness in the labor market. Will we see an improvement in the upcoming release?
  6. Retail Sales: Friday, 13:30. Retail sales slowed to 0.4% in August, down from 0.6%. The core reading improved to 0.5%, up from -0.4%. However, this missed the estimate of 0.9%.
  • All times are GMT

USD/CAD Technical Analysis

Technical lines from top to bottom:

1.3502 is an important monthly resistance line.

1.3330 (mentioned last week) is next.

1.3260 switched to resistance last week after strong losses by USD/CAD.

1.3137 is fluid, as the pair ended the week just below this line.

1.3014 is the first support level.

1.2936 has held in support since October 2018.

1.2844 is next.

1.2730 is the final support level for now.

I am bearish on USD/CAD

The US dollar has settled down after sharp losses during the week of the election. Still, the greenback could face a bumpy road, as Covid-19 appears out of control and could cause further an economic slowdown in the US.

Follow us on Sticher or iTunes

Further reading:

Safe trading!

Get the 5 most predictable currency pairs

About Author

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.