The Canadian dollar posted modest losses last week, as USD/CAD closed at 1.2528. This week’s highlight is Core Retail Sales. Here is an outlook on the major market-movers and an updated technical analysis for USD/CAD.
Canadian Wholesale Sales looked sharp, jumping 2.5%. The Fed minutes were dovish in stance, as policymakers raised concerns that a rate hike might hurt the US recovery. Unemployment claims dropped sharply, but manufacturing numbers disappointed.
[do action=”autoupdate” tag=”USDCADUpdate”/]USD/CAD daily chart with support and resistance lines on it. Click to enlarge:
- Corporate Profits: Tuesday, 13:30. Corporate Profits is released every quarter, magnifying the impact of each reading. The indicator improved 3.7% in Q4, compared to a gain of 2.6% in Q3.
- BOC Governor Stephen Poloz Speaks: Tuesday, 19:00. Poloz will speak at an event in London, Ontario. The markets will be looking for clues as to the Bank’s future monetary policy.
- Core CPI: Thursday, 13:30. This is the key event of the week and can have a strong impact on movement of USD/CAD. The index has looked sluggish, posting two straight declines. The estimate for the January reading stands at 0.1%.
- CPI: Thursday, 13:30. Similar to Core CPI, this index has posted two consecutive declines, with the December release coming in at a dismal -0.7%. A third decline is anticipated, with the estimate standing at -0.3%.
* All times are GMT
USD/CAD Technical Analysis
USD/CAD opened the week at 1.2455 and dropped to 1.2361. The pair then reversed directions and climbed to a high of 1.2564, testing resistance at 1.2541 (discussed last week). USD/CAD closed the week at the 1.2528.
Live chart of USD/CAD:
[do action=”tradingviews” pair=”USDCAD” interval=”60″/]Technical lines, from top to bottom
We start with resistance at 1.2924. This line was last tested in March 2009.
1.2711 is the next line of resistance.
1.2541 was tested as the pair posted gains late last week. It remains a weak resistance line.
1.2387 is providing strong support. It was tested early in the week but recovered as the US dollar rebounded.
1.2230 is the next support level.
1.2114 is the final support line for now. This line switched from resistance in late January when the US dollar started a strong rally.
I am bullish on USD/CAD
Canadian growth continues to lag behind its southern neighbor, and weak oil prices are not helping matters and will likely weigh on the Canadian dollar. US numbers have been lukewarm of late, but the markets continue to bank on a rate hike sometime in 2015.
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Further reading:
- For a broad view of all the week’s major events worldwide, read the USD outlook.
- For EUR/USD, check out the Euro to Dollar forecast.
- For the Japanese yen, read the USD/JPY forecast.
- For GBP/USD (cable), look into the British Pound forecast.
- For the Australian dollar (Aussie), check out the AUD to USD forecast.
- For the kiwi, see the NZDUSD forecast.
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