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The Canadian dollar  posted modest gains last week, as USD/CAD  closed the week at 1.3845. This week has just two events on the calendar. Here is an outlook on the major market-movers and an updated technical analysis for USD/CAD.

In the US, employment numbers improved, as Unemployment Claims dropped to 262 thousand.  CPI and Core CPI  edged  above  their estimates, reviving speculation about a March rate hike.  Canadian numbers were mixed, as Manufacturing Production beat the forecast, while Core Retail Sales  posted sharp decline and  missed  expectations.

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

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

 

USDCAD_ Daily Chart Feb22-26

  1. BOC Deputy Governor Lawrence Schembri Speaks: Wednesday, 17:30. Schembri will speak at an event in Sudbury. The markets will be looking for hints regarding the BOC’s future plans  regarding interest rate moves.
  2. Corporate Profits: Thursday, 13:30. This indicator is released on a quarterly basis, magnifying the impact of each reading. The indicator has shown strong volatility, and posted a decline of 5.4% in the third quarter, compared to a sharp gain of 12.9% in the previous quarter. Will we see a reading in positive territory in the upcoming release?

USD/CAD Technical Analysis

USD/CAD opened the week at 1.3883 and  dropped to a  low  of 1.3784, as support held firm at 1.3757 (discussed last week). The pair then reversed directions and climbed to a high of 1.4016.  USD/CAD softened late in the week and closed at 1.3845.

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

Technical lines, from top to bottom

We  begin with resistance at 1.4310, which has held since late January.

1.4159 is the next line of resistance.

1.4019 has strengthened in resistance as the pair trades at lower level.

The round number of 1.39  has switched to a resistance role. It is a weak line and could see further action during the week.

1.3757 was a cap in December.

1.3620 is the next support line.

1.3457 is  the final support level for now.

I am  neutral on USD/CAD

The US economy has slowed down in 2016, but last week’s employment and inflation numbers beat expectations, so a March rate hike is again on the table. The Canadian dollar has improved in recent weeks, although weak oil prices continue to weigh on the currency.

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