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The Canadian dollar enjoyed an excellent week, as  USD/CAD  dropped about 140 points. There are 7 events this week.  Here is an outlook on the major market-movers and an updated technical analysis for USD/CAD.

In the US, data was generally upbeat, but traders were hesitant to buy the greenback ahead of the Fed Statement. In Canada, Building Permits posted was unexpectedly strong.

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

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

USDCAD Daily June 15-19

  1. Manufacturing Sales: Monday, 12:30. The week starts off with this key event. Manufacturing Sales posted an excellent gain of 2.9% in March, following two consecutive declines. This easily beat the estimate of 1.2%. The markets are bracing for a sharp downturn, with an estimate of -1.3%.
  2. Foreign Securities Purchases: Monday, 12:30. This indicator is closely connected to currency demand, as foreigners must purchase Canadian securities with Canadian dollars. The indicator shot up in March, with a reading of C$22.47 billion, crushing the estimate of C$7.23 billion.
  3. Wholesale Sales: Wednesday, 12:30. This is an important consumer spending indicator. The indicator bounced back in March with a strong gain of 0.8%, within expectations. This reversed two straight declines. A smaller gain is expected in the  April report,  with an estimate of 0.3%.
  4. Core CPI: Friday, 12:30. Core CPI excludes the 8 most volatile items, which are included in Core CPI. The index slipped to 0.1% in April, matching the forecast. This marked a 4-month low. The indicator is expected to improve in the May report, with an estimate of 0.3%.
  5. Core Retail Sales: Friday, 12:30. Core Retail Sales excludes automobile sales, which are volatile and tend to distort the underlying trend. The indicator softened to 0.5% in March, within expectations. The markets are expecting a weaker reading in the April release, with an estimate of 0.3%.
  6. CPI: Friday, 12:30. CPI  declined  0.1%  in April, marking the first decline of 2015. The forecast was +0.1%. The markets are expecting better news in the May report, with an estimate of 0.4%.
  7. Retail Sales: Friday, 12:30. Retail Sales is the primary gauge of consumer spending. The indicator softened in April, posted a gain of 0.7%, which was within expectations.  Little change is expected  in the May report,  with  an estimate of 0.7%.

USD/CAD Technical Analysis

USD/CAD opened the week at 1.2461 and  quickly touched a high  of 1.2473, testing support at 1.2387. The pair then  moved  downwards, touching a  low of 1.2202 as it tested support at 1.2230 (discussed last week). USD/CAD then recovered and closed the week at 1.2318.

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

Technical lines, from top to bottom

With the Canadian dollar posting sharp gains, we  start  at lower levels.

1.2798 has remained intact since mid-March.

1.2646 is the next resistance line.

1.2541 has provided an important cap in June.

1.2387  remains an  immediate support level.

1.2230 was tested in support as USD/CAD posted sharp losses last week.

1.2114 is a strong support level.

1.1995, situated just  below the symbolic  1.20 level, has remained intact since mid-May.

1.1872 is the final support level for now.

I am bullish on USD/CAD

In the US, all eyes are on the Federal Reserve,  and any hints  with regard to a rate hike later in the year could  support the US dollar. There are   host of Canadian events this week, and these numbers will have likely have a significant effect on the Canadian dollar.

In our latest podcast, we bring you up to speed with the Fed decision and the USD impact, and also tackle the Greek crisis from two different angles.

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