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  • Soaring oil prices boosted the Canadian dollar last week.
  • Investors expect employment change in Canada to increase.
  • The bears could experience some support at 1.2500.

The weekly USD/CAD forecast is bearish as the oil prices are expected to continue the upside, weighing on the loonie.

Ups and downs of USD/CAD

This past week has seen USD/CAD close on a bearish candle. Most of this move can be attributed to the recent ban on Russian oil, which favored the Canadian dollar. The EU summit held on Monday and Tuesday ended with an agreement to ban 90% of Russian oil imports.

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This ban pushed oil prices up and consequently pushed USD/CAD lower. There was some relief from supply concerns when Saudi Arabia announced that it would increase production, but it was short-lived as oil prices resumed their move higher.

The Canadian dollar was also boosted by the positive GDP data from Canada on Tuesday, which came in higher than forecast. The Bank of Canada on Wednesday held interest rates at 1.50%. The pair closed higher on Friday after the positive NFP data from the US.

Next week’s key events for USD/CAD

USD/CAD weekly forecast events

The USD/CAD traders will be paying attention to news releases from the US and Canada this coming week. Canada will be reporting the difference in value between imported and exported goods for April with the trade balance report. There will also be a jobs report on Friday which will show the employment change and unemployment rate for May.

The United States will be reporting inflation data for May on Friday. Investors expect core inflation to go down to 5.9% from 6.2%.

USD/CAD weekly technical forecast: Bears eying 1.2500

USD/CAD weekly forecast chart

Looking at the daily chart, we see the price is still trading within the bullish channel, and last week bears pushed the price towards the channel’s support. RSI is trading below the 50 mark showing bearish momentum. The price is also trading below the 22-SMA and could keep this trend next week.

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The channel’s support could stop the move down and push the price higher. At the same time, there is the possibility of a break of support given the strong move we saw last week.

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