Looking for the latest outlook for this week? Check the full section: Canadian Dollar Forecast
The Canadian dollar stood rather strong against the huge greenback strength and didn’t give to major technical lines. The upcoming short week includes only two releases, both important. Here’s an outlook for the upcoming week in Canada, and an updated technical analysis for USD/CAD.
USD/CAD chart with support and resistance lines marked on it. Click to enlarge:
Strong inflation figures supplied most of the loonie’s strength. Mark Carney’s BOC might need to raise the rates earlier than expected. It also depends on the GDP in the upcoming week. Let’s start:
- Retail Sales: Published on Monday at 13:30 GMT. Canada’s retail sales have expanded in the past two months, as the economy is out of recession. Last month’s 1% rise was stronger than expected, and also the revision of the previous month helped the loonie. Core Retail Sales which exclude the most volatile items, are no less important. Also here, a strong 1.1% gain was reported last time, with a revision of the previous month as well. Retail Sales are expected to rise by 0.9% and Core Retail Sales by 0.5% this month.
- GDP: Published on Wednesday at 13:30 GMT. Canada is unique with the monthly release of GDP. The last release was for the month of September, the last of the third quarter. It showed that Canada is out recession, with a 0.4% gain. This was 0.1% less than predicted and slightly hurt the Canadian dollar. A growth rate of 0.3% is predicted this month.
USD/CAD Technical Analysis
USD/CAD traded between 1.0550 to 1.0746 this week, in a higher range. The 1.0750 resistance line, mentioned in last week’s outlook, was successfully tested and is now a strong resistance line.
Above 1.0750, 1.0850 is the next line of resistance, being a peak in November. Looking further up, 1.1130 is a major resistance line that was tested in August a few time.
Looking down, 1.04 remains a strong support line. Even lower, a raging loonie would meet the year-to-date low of 1.02. Parity probably won’t be reached this year.
I continue being neutral on USD/CAD.
Good news didn’t stop coming from Canada after the great employment numbers and great housing figures. If it wasn’t for the greenback’s strength, I would be bearish – pro Canadian dollar.
Further reading:
- For a broad view of all the week’s major event in all currencies, read the forex weekly outlook.
- For the Euro, read the EUR USD Forecast.
- For the British Pound, check out the GBP/USD forecast.
- For the Australian dollar, read the Aussie forecast.
Want to see what other traders are doing in real accounts? Check out Currensee. It’s free.
Share
