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The Canadian dollar  continued to lose ground last week. USD/CAD  approached the 1.19 line, its highest level since May 2009. This week’s sole release is the Bank of Canada Business Outlook Survey. Here is an outlook on the major market-movers and an updated technical analysis for USD/CAD.

The tale of two economies continues, as  the  US economy  outperforms its northern neighbor.  Canadian Employment Change posted a second straight decline, while Building Permits dropped sharply. In the US, employment data was solid, as Nonfarm Payrolls was higher than expected, and the unemployment rate fell to 5.6%.

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

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

USDCADForecast Jan.12-16

 

  1. Bank  of  Canada  Business Outlook Survey:  Monday, 15:30. This important release, published every quarter,  surveys about 100 businesses. It provides a snapshot  of the mood and health of the business sector and can have an impact on the movement of USD/CAD.

* All times are GMT

USD/CAD Technical Analysis

USD/CAD opened the week at 1.1793 and touched a low of 1.1731. The pair then  sharply reversed directions  and climbed all the way to 1.1890,  pushing above resistance at 1.1872 (discussed last week). USD/CAD closed the week at 1.1862.

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

Technical lines, from top to bottom:

We begin with resistance at 1.2387. This line was an important cap, starting in May 2005.

1.2128 has remained intact as resistance since February 2009.

1.1975 is  protecting the psychologically important level of 1.20. This line has held firm since November 2005.

1.1872 was a key resistance line in February 2007. It was tested late in the week and is currently a weak line.

1.1743 is the first line of support. It was  tested early  in the week  but has strengthened as the pair trades at higher levels.

1.1640 is the next line of support.

1.1487 switched to support in mid-December as USD/CAD continued to rally higher.

1.1340  is the final support level for now. It has held firm since the first week of December.

I  am  bullish  on USD/CAD

The Canadian  economy  continues to  struggle, as underlined by weak  job numbers last week. The  low price of oil is  putting a serious dent in  export revenue and could lower  inflation which is already at very low levels. The US economy continues to look solid, and an expected rate hike is good news for the US dollar.

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