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It was  another uneventful week for the  Canadian dollar  as  USD/CAD  was unchanged.  The pair closed the week at the 1.23 line. The upcoming week  has just two events, but the GDP release could have a strong effect on the movement of USD/CAD.    Here is an outlook on the major market-movers and an updated technical analysis for USD/CAD.

In the US housing numbers were strong,  and the week ended with excellent consumer sentiment data. Still, US Final GDP  declined by 0.2%, matching the forecast. There were no Canadian economic releases last week.

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

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

USD_CAD_Forecast.Jun29-July3

 

  1. RMPI:  Monday, 12:30.  RMPI is the primary gauge of inflation in the manufacturing sector. The index tends to show a lot of volatility, often leading to readings that are well off the estimates. In April, the indicator bounced back with a sharp gain of 3.8%, easily beating the forecast of 1.7%.  Will the indicator repeat with another strong release?
  2. GDP:  Tuesday, 12:30. GDP is one of the most important economic indicators, and traders should treat it as a market-mover. Canada releases GDP on a monthly basis, unlike most other developed economies which publish the indicator each quarter. The indicator has struggled, posting just one gain in 2014. The indicator declined by 0.2% in March, shy of the estimate of +0.2%.  The markets are expecting better news in the April report, with an estimate  of  +0.1%.

* All times are GMT.

USD/CAD Technical Analysis

USD/CAD opened the week at 1.2275 and  quickly dropped to a low of 1.2218, testing support at 1.2230 (discussed last week). The pair then reversed directions, climbing to a high of 1.2423.  USD/CAD closed the week at 1.2300.

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

Technical lines, from top to bottom

1.2798 has remained intact since mid-March.

1.2646 is the next resistance line.

1.2541 has provided an important cap in June.

1.2386  remains an  immediate support level.

1.2230 was tested in support  for a second straight week as USD/CAD softened early in the week before recovering.

1.2114 is a strong support level.

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

1.1873 is the final support level for now.

I am bullish on USD/CAD

The FOMC may be slightly more hawkish than perceived, as a Fed policymaker spoke of one or even two rate hikes in 2015. If there are further hints about a rate hike, the greenback could jump higher. Over in Canada, GDP has struggled, and a weaker than expected reading could hurt the loonie.

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