The Canadian dollar continued to move higher last week, posting gains of 240 points, closing at 1.2994. This marked the first weekly close below the 1.30 line for the first time since October 2015. This week’s sole event is the Annual Budget Release. Here is an outlook on the major market-movers and an updated technical analysis for USD/CAD.
The Federal Reserve was very dovish in its policy statement, sending the greenback to lower levels. Canadian retail sales posted strong gains, helping the Canadian dollar continue its impressive rally.
Updates:
USD/CAD daily graph with support and resistance lines on it. Click to enlarge:
- Annual Budget Release: Tuesday, 16:00. The annual budget includes the government’s projected spending, income and borrowing levels. Any unexpected announcements regarding the budget can have a sharp impact on the movement of USD/CAD.
USD/CAD Technical Analysis
USD/CAD opened the week at 1.3236 and touched a high of 1.3405, as resistance held firm at 1.3457 (discussed last week). The pair reversed directions late in the week, dropping all the way to 1.2921. USD/CAD closed the week at 1.2994.
Live chart of USD/CAD: [do action=”tradingviews” pair=”USDCAD” interval=”60″/]
Technical lines, from top to bottom
1.3457 held firm for a second straight week as USD/CAD posted gains before retracting.
1.3353 is the next line of resistance.
13174 was a cap in October 2015.
1.3064 is protecting the symbolic 1.30 line.
The round number of 1.2900 was a cushion in October.
1.2780 is the next support level.
1.2646 is the final support line for now.
I am neutral on USD/CAD
With no other Canadian releases this week, the annual federal budget will take on added significance. The government has promised fiscal stimulus, and if the markets like the package, the Canadian dollar could continue to rally.
In our latest podcast we digest the dovish Fed
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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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