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The Canadian dollar rebounded sharply last week, as USD/CAD  dropped about 150 points. The pair closed just above the 1.38 level.There are no Canadian economic releases this week. Here is an outlook on the major market-movers and an updated technical analysis for USD/CAD.

In the US, Final GDP for the third quarter was respectable, with a gain of 2.0%, very close to the estimate. Housing numbers disappointed, and durable goods were weak, but within expectations. Canadian GDP posted a flat reading of 0.0%, which was a strong improvement over the previous reading of -0.5%.

[do action=”autoupdate” tag=”USDCADUpdate”/]

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

USD_CAD Weekly Forecast Dec31-Jan1

 

  • There are no Canadian releases this week

USD/CAD Technical Analysis

USD/CAD opened the week at 1.3942 and quickly touched a high of 1.3994. It was all downhill from there, as the pair dropped to a low of 1.3782, as  support held firm at 1.3759 (discussed last week). USD/CAD closed the week at 1.3810.

Live chart of USD/CAD: [do action=”tradingviews” pair=”USDCAD” interval=”60″/]

Technical lines, from top to bottom

We begin at with resistance at 1.4310.

1.4157 was an important cushion in April 2003.

1.4003 is the next resistance line, just above the psychologically important 1.40 level.

The round number of 1.39 remains busy and has switched to a resistance role. It could see further action earlier in the week.

1.3759 held firm support as the Canadian dollar posted strong gains last week.

1.3587 was a cap in March 2004.

1.3435 has held firm since early December. It is the final support line for now.

I am  neutral on USD/CAD

The Canadian dollar recovered some ground last week, after a couple of weekly declines.  The upcoming  Christmas week will be marked by very light trading, and the pair is not expected to display any substantial movement.

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