The Canadian dollar was a victim of the global turmoil that began with its southern neighbor. Inflation data is the main event this week. Here’s an outlook for the Canadian events, and an updated technical analysis for USD/CAD. Last week the Canadian dollar touched parity with the US dollar but bounced back. Housing starts posted a good reading of 205,000 new building units helping the loonie to rebound. USD/CAD daily chart with support and resistance lines on it. Click to enlarge: Update August 18, 15:10 GMT: Canadian Dollar Approaching Parity With USD on Global Recession Fears Let’s Start: New Motor Vehicle Sales: Monday,12:30. The number of new cars sold in May dropped by 6.1% to 126,479 units the worst fall since December 2008 and following 1.1% decline in the previous month. This slowdown is a direct effect of Japan’s earthquake in March. A rise of 2.4% is predicted now. Manufacturing Sales: Tuesday, 12:30. Canadian manufacturing sales declined by 0.8% in May worse than the 0.2% drop expected the decline in the auto industry resulted from the earthquake and tsunami that hit Japan in March although 11 industries reported sales declines. A further decrease of 0.3% is predicted now. Foreign Securities Purchases: Wednesday, 12:30. Foreign acquisitions of Canadian securities increased to a seasonally adjusted CAD15.04 billion in May contrary to the CAD7.41 billion expected and following CAD8.52 billion in April. A drop to CAD10.33 billion is forecasted. Leading Index: Thursday, 12:30. Canada’s composite leading gained a small rise of 0.2% in June resulting from Japan’s quake in March. Analysts forecasted 1.0% rise. The automobile sector was the main cause for this fall. A climb of 0.5% is forecasted. Wholesale Sales: Thursday, 12:30. Canadian wholesale sales increased in May by 1.9% the fastest rate in 18 months following 0.1% drop in the previous month and well beyond the 0.2% gain predicted by analysts. The increase was mainly due to higher sales of agricultural supplies. 1.5% increase is expected. Inflation data: Friday, 11:00. Canada’s inflation rate dropped more than predicted in June decreasing 0.7% from 0.7% gain in the previous month and more than 0.2% drop forecasted by analysts. Core CPI followed this decline with 0.6% drop from 0.5% increase in May and contrary to the flat reading predicted. This decline prevented the BOC from raising rates. Coth CPI and Core CPI are expected to climb by 0.2%. *All times are GMT. USD/CAD Technical Analysis Dollar/CAD climbed up and touched parity at the beginning of the week, before retreating and bouncing off the 0.9750 level (mentioned last week). It eventually closed higher. Technical lines, from top to bottom: 1.02 was the historic low of 2009, and is a significant line of resistance, currently far off. It is followed by 1.0140, which capped the pair towards the end of 2010. The last line above parity is 1.0060. This was the highest level in 2011 and is getting closer. The very round number of USD/CAD parity is the obvious line below, and it returns to strength after the recent test. Under parity, we have two close lines – 0.9977, which was a trough in 2010, was also tested at the beginning of March and proved to be significant on the recent rise. Below, 0.9915 was a peak back in June and is now minor resistance, after being run through now. 0.9850 was a swing high in May, and provided some support just now. The round number of 0.98 also served as a cushion, and is minor now. 0.9750 was a very distinctive line earlier, separating ranges in a great way. It provided a bouncing spot for further moves higher and proved to be strong. 0.9667 was a cushion in March and later worked as resistance. This line provided support a few weeks ago, and had an important role in holding back recovery attempts, over and over again. The break above it pushed the pair quickly. 0.96 was a minor support line that played a role earlier in the year. It is weaker now. 0.9520 becomes a minor line after being shattered. It worked as support and also as minor resistance during April. It managed to cap the recovery attempt for some time. 0.9450 was a double bottom just now and is very important – it’s the new 2011 low. USD/CAD went as low as 0.9406 before the surge began. Below this line, we have lines last seen in 2007 – 0.9250 is notable, as well as the historic low of 0.9056. I turn from bullish to neutral on USD/CAD. With some signs of improvement in the US, and more stable oil prices, the loonie is likely to stabilize, at least for now. As with the recent employment figures, the more recent economic indicators remain mixed. 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 New Zealanddollar (kiwi), read the NZD forecast. For USD/CAD (loonie), check out the Canadian dollar For the Swiss Franc, see the USD/CHF forecast. Anat Dror Anat Dror Anat Dror Senior Writer I conceptualize, design and create multi-lingual websites. Apart from the technical work, my projects usually consist of writing content for these sites in English, French and Hebrew. In the past, I have built, managed and marketed an e-learning center for language studies, including moderating a live community of students. I've also worked as a community organizer Anat's Google Profile View All Post By Anat Dror Canadian Dollar ForecastMinors share Read Next British Retail Sales Rise Within Expectations Yohay Elam 11 years The Canadian dollar was a victim of the global turmoil that began with its southern neighbor. Inflation data is the main event this week. Here's an outlook for the Canadian events, and an updated technical analysis for USD/CAD. Last week the Canadian dollar touched parity with the US dollar but bounced back. Housing starts posted a good reading of 205,000 new building units helping the loonie to rebound. USD/CAD daily chart with support and resistance lines on it. 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