- Apr 23, 14:42: French fate and British snaps – MM #141: We are back from the vacation just in time for the biggest political event of 2017: the French elections. We...
- Apr 23, 13:44: The week ahead: Hard reality for the US and UK: The last week of April starts with the echoes from the French elections and continues with key economic data. A...
- Apr 20, 9:00: Technical levels for majors and crosses – post Easter: Markets are back from the Easter holidays and they are in full swing, with the pound standing out. What levels...
- Apr 19, 21:07: USD/CAD surges towards 1.35 as oil prices tumble down: Dollar/CAD woke up from its range and jumped. The pair trades at 1.3487, some 100 pips up on the day....
USD/CAD daily graph with support and resistance lines on it. Click to enlarge:
- Foreign Securities Purchases: Tuesday, 12:30. This indicator is directly linked to currency demand as foreigners must purchase Canadian dollars in order to buy Canadian securities. In January, purchases slipped to C$6.20 billion, well short of the forecast of C$9.45 billion. The downward trend is expected to continue, with an estimate of C$5.21 billion.
- BoC Senior Deputy Governor Carolyn Wilkins Speech: Tuesday, 16:45. Wilkins will speak at an event in Toronto. A speech which is more bullish than expected is bullish for the Canadian dollar.
- BoC Senior Deputy Governor Carolyn Wilkins Speech: Wednesday, 17:00. Wilkins will participate in a panel sponsored by the IMF. The markets will be looking for clues regarding the BoC’s future monetary policy.
- CPI: Friday, 12:30. This is the key event of the week. CPI dropped to 0.2% in February, down from 0.9% a month earlier. Still, this matched the forecast. The estimate for March stands at 0.4%.
USD/CAD Technical Analysis
USD/CAD opened the week at 1.3407 and quickly climbed to a high of 1.3426. The pair dropped to a low of 1.3223 late in the week, as resistance held at 1.3212 (discussed last week). USD/CAD closed the week at 1.3318.
Technical lines, from top to bottom
We start with resistance at 1.3757.
1.3648 was an important support level in February.
1.3551 is the next line of resistance.
1.3457 was a high point in September 2015.
1.3351 has switched to a resistance role following losses by USD/CAD. It is a weak line and could see more action early in the week.
1.3212 is providing support. It was a cap in the second quarter of 2016.
1.3124 is the next support level.
1.3003 is protecting the symbolic 1.30 level.
1.2908 is the final support level for now.
I am bullish on USD/CAD
The Fed minutes were slightly hawkish and the markets are expecting another rate hike in June. With the BoC saying that it is neutral towards a rate move, monetary divergence favors the US dollar.
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