USD/CAD Forecast Nov. 2-6 – US dollar soars, all eyes on US election

USD/CAD climbed sharply last week, with gains of 1.4%. This was the sharpest 1-week gain since March. There are four events in the upcoming week, including Employment Change. Here is an outlook at the highlights and an updated technical analysis for USD/CAD.

The Bank of Canada maintained interest rates at 0.25% and signaled that it would not hike rates before 2023. The central bank also tweaked QE, lowering assets from “at least” C$5 billion/week to “at least” C$4 billion/week. Canada’s GDP showed a gain of 1.2% in August, down from 3.0%. Still, this beat the estimate of 0.9%. On the inflation front, the Raw Materials Price Index declined by 2.2% in September, the first decline in five months. The reading was well short of 0.3%.

In the US, durable goods orders improved sharply in September. The headline reading soared to 1.9%, up from 0.4%. This crushed the estimate of 0.5%. The core reading improved to 0.8%, up from 0.4%. Advance GDP jumped 33.1% in Q3 its strongest quarter on record. However, it barely recouped the Q2 loss of 31.4%. There was more good news on the employment front, as jobless claims fell to 751 thousand, down from 787 thousand beforehand. Core PCE Price Index, the preferred inflation gauge of the Federal Reserve, edged down to 0.2%, down from 0.3%.

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