The Canadian dollar ticked lower last week, as USD/CAD closing at 1.3462. There are just two events on the calendar this week. Here is an outlook on the major market-movers and an updated technical analysis for USD/CAD.
Canada added 54.5 thousand jobs in May, crushing the estimate of 11.5 thousand. In the US, the markets are increasingly skeptical about Trump, underscored by Trump’s failure to pass any health-care or tax reform. The “dovish hike” is unlikely to excite the markets and send the greenback higher.Updates:
- Jun 18, 15:55: The week: ahead US housing data and time to digest: The inconclusive UK elections found Theresa May scrambling to form a coalition. She is pressured to soften her stance on...
- Jun 15, 21:58: CAD: How High Can CAD Fly With An October BoC Hike? -TD: The Canadian dollar got a big boost this week from two BOC speakers, providing a hawkish tone. What does it...
- Jun 15, 14:41: USD extends gains across the board after the data and amid the Fed fallout: The US dollar continues gaining ground as US traders provide another reaction to the hawkish Fed hike. The trigger is...
- Jun 15, 12:23: Technical levels for majors and crosses – mid-June: It is the middle of June and currencies are on the move amid the all-important Fed decision. In the two...
- Jun 15, 11:07: USD/CAD at stubborn support, DAX hitting resistance: It looks like the USDCAD is having some hard time breaking below the 1.3250 support level. There is a doji-like...
- Jun 15, 7:35: Fed raises rates, leaves dots unchanged & Yellen is optimistic – USD recovers: The Federal Reserve did acknowledge the downfall in inflation by saying they are monitoring inflation closely. However, it did not impact...
- Jun 14, 14:44: Will the FED change its mind? USD could crash: If we look at the big sell-off in the dollar, the answer to the question in the headline is a...
- Jun 14, 14:30: US core CPI falls to 1.7%, retail sales drop 0.3% – USD follows: US retail sales and inflation figures badly disappoint expectations. Will the Fed change its mind about raising rates? Core CPI...
- Jun 13, 16:06: Fed Preview: 5 Things to watch out for in a “dovish hike”: The Fed is trapped in its own setting of expectations. They are almost certainly going to raise the interest rate...
- Jun 13, 15:15: CAD: ‘Shifting Sands’ For CAD; Where To Target? – BTMU: The Canadian dollar got a shot in the arm from the hawkish shift from Wilkins, later followed up by Poloz....
- Jun 13, 8:20: USD/CAD crashes after Wilkins goes hawkish: The Bank of Canada can move the Canadian dollar, but volatility is usually the result of a rate decision. This...
USD/CAD daily graph with support and resistance lines on it. Click to enlarge:
- Manufacturing Sales: Tuesday, 8:30. The indicator rebounded in March with a strong gain of 1.1%. This was just shy of the forecast of 1.1%. The estimate for April stands at 0.9%.
- Foreign Securities Purchases: Thursday, 8:30. The indicator dropped to C$15.13 billion in March, short of the estimate of C$17.23 billion. The downswing is expected to continue in April, with an estimate of C$12.14 billion.
USD/CAD Technical Analysis
USD/CAD opened the week at 1.3499 and touched a high of 1.3536 late in the week, as resistance held firm at 1.3551 (discussed last week). The pair was unable to consolidate at these levels and dropped to a low of 1.3421. USD/CAD closed the week at 1.3480.
Technical lines, from top to bottom
We start with resistance at the round number of 1.39.
1.3794 was the high for the month of May.
1.3648 is next.
1.3551 held firm for a second straight week as USD/CAD posted gains late in the week before retracting.
1.3457 was a high point in September 2015.
1.3351 has held in support since mid-April.
1.3212 is next.
1.3083 is the final support level for now.
I am neutral on USD/CAD
The BoC is unlikely to raise rates anytime soon, as there is plenty of slack in the economy. The markets have priced in a rate hike next week, and ongoing political turmoil in the US could weigh on the US dollar.
Our latest podcast is titled US labor market and UK’s Labour comeback
- 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.