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The Canadian dollar  repeated with an excellent week, posting  gains of  more than 200 points. USD/CAD  closed  at 1.2942, its lowest  level since July.  This week’s highlight is Manufacturing Sales.  Here is an outlook on the major market-movers and an updated technical analysis for USD/CAD. The Canadian dollar gained ground as a result.

The Canadian dollar received a boost  from a  better than expected Canadian employment numbers and higher oil prices.  In the US,  the dovish Fed minutes sent  the greenback broadly lower and the  loonie took full advantage.

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

USD/CAD daily chart with support and resistance lines on it.

AUD_USD_Forecast.Oct.12-16

  1. BOC Governor Stephen Poloz Speaks:  Monday, 17:20. Poloz will speak at an event in Washington, D.C. The markets will be listening closely for any hints regarding the BOC’s future monetary policy.
  2. Manufacturing Sales:  Friday, 12:30. Manufacturing Sales is a key event which can have a strong impact on the movement of USD/CAD. The indicator has posted a couple of strong gains, with the July gain of 1.7% easily beating the estimate of 1.1%. However, the markets are bracing for a sharp turnaround in the August reading, with an estimate of -0.6%.
  3. Foreign Securities Purchases:  Friday, 12:30. The indicator plunged in July, coming in at C$-10.12 billion, nowhere near the forecast of C$5.5o billion. This was the worst reading in 7 months. The August report is expected to be much stronger, with an estimate of C$2.21 billion.

* All times are GMT.

USD/CAD Technical Analysis

USD/CAD opened the week at 1.3171 and  moved lower throughout the week,  touching a low of 1.2899,  testing support  at 1.2930 (discussed last week).  USD/CAD closed the week at 1.2942.

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

Technical lines, from top to bottom

With the Canadian dollar posting strong gains, we start at lower levels:

1.3382 has strengthened in resistance following the pair’s sharp drop.

1.3213 was an important cap in early August.

1.3165 was breached as the pair posted sharp losses last week. It has switched to a resistance role and is a weak line.

1.3063  continues to  protect the  symbolic line of 1.30.

1.2930 has held firm since late July.

1.2798 is next.

1.2648 is the final support level for now.

I am  bullish on USD/CAD

The Canadian dollar has put together an impressive rally against its US counterpart, but the markets will now move on after the disappointing Fed minutes. US fundamentals remain stronger than Canada, so the  pair  could see  some kind of  a correction this week.

In the latest podcast we explain how no news is bad news for the USD and more:

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