USD/CAD showed limited movement last week. There are no Canadian events this week, so US releases will have a magnified effect on the movement of USD/CAD.
Canada CPI posted its first gain in four months, with a reading of 0.4%. The core release was unchanged at 1.8%. The ADP nonfarm employment showed a loss in jobs for a third straight month, with a reading of -79.5 thousand. The week ended on a positive note, as retail sales showed strong gains in September, with the headline figure coming in at 1.0% and core retail sales at 1.1%. These readings easily beat the estimates of 0.2% for headline retail sales and 0.0% for the core release.
In the US, the Empire State Manufacturing Index fell from 10.5 to 6.3, as the rate of expansion slowed for a second straight month. The Philly Fed Manufacturing Index fell to 26.3, down from 32.3 points. Retail sales fell sharply in October, which weighed on the US dollar. Headline retail sales fell from 1.9% to 0.3%. This was the weakest gain since April. The core reading slowed to 0.2%, down from 1.5% beforehand.
USD/CAD daily chart with support and resistance lines on it. Click to enlarge:
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 has held in resistance since the first week in November.
1.3137 is a weak resistance 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 Canadian dollar has posted strong gains in November, and with investor sentiment towards the US dollar at low levels, the Canadian currency could make further inroads.
Further reading:
- EUR/USD forecast – for everything related to the euro.
- GBP/USD forecast – Pound/dollar projections.
- AUD/USD forecast – analysis for the Aussie dollar.
- USD/CAD forecast – Canadian dollar predictions.
- Forex+ weekly forecast – Outlook for the major events of the week.
Safe trading!
