The Canadian dollar changed directions last week, as USD/CAD surged 360 points. The pair closed just above the 1.29 line. The upcoming week is a quiet one, with just three releases. Here is an outlook on the major market-movers and an updated technical analysis for USD/CAD.
It was a rough week for employment indicators as, Nonfarm Payrolls was dismal, falling to 160 thousand, well below expectations. Canadian job numbers also struggled, as Employment Change posted a decline of 2.1 thousand, its third decline in four readings.
[do action=”autoupdate” tag=”USDCADUpdate”/]USD/CAD daily graph with support and resistance lines on it. Click to enlarge:
- Housing Starts: Monday, 12:15. Housing Starts remain strong, but slipped to 204 thousand in March, missing the forecast of 215 thousand. The markets are expecting the downward trend to continue, with an estimate standing at 195 thousand.
- BOC Senior Deputy Governor Carolyn Wilkins Speaks: Wednesday, 12:45. Wilkins will deliver a speech at a conference in Montreal. The markets will be looking for clues as to the BoC’s plans regarding future monetary policy.
- NHPI: Thursday, 12:30. This inflation indicator provides a snapshot of the level of activity in the housing sector. The index posted a small gain of 0.2% in February, matching the forecast. The markets are expecting a slight improvement in March, with the estimate standing at 0.3%.
USD/CAD Technical Analysis
USD/CAD opened the week at 1.2541 and dropped to a low of 1.2458 early in the week. The pair then reversed directions and shot upwards, touching a high of 1.2951, breaking above resistance at 1.2900 (discussed last week). USD/CAD closed the week at 1.2906.
Live chart of USD/CAD:
Technical lines, from top to bottom
With USD/CAD posting strong gains, we start at higher levels:
1.3353 has provided resistance since mid-March.
1.3219 was a cap in April.
1.3081 is next.
1.2990 has held firm since mid-April.
The round number of 1.2900 is providing weak support. It could see further action early in the week.
1.2780 is next.
1.2646 has switched to support after USD/CAD posted sharp gains.
1.2538 is the final support level for now.
I am neutral on USD/CAD
Weak Canadian numbers last week could continue to weigh on the Canadian dollar. At the same time, if oil prices move higher, the loonie could follow suit and move to higher ground.
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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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