The loonie closed the week closer to parity. The upcoming week consists of important job figures among other events. Here’s an outlook for Canadian events and an updated technical analysis for USD/CAD.
USD/CAD graph with support and resistance lines on it. Click to enlarge:
One of the things that helped the Canadian dollar was another better-than-expected GDP. Similar to last month’s release, the economy grew at a high rate, making policymakers feel comfortable. OK, let’s start the review:
- Building Permits: Published on Wednesday at 12:30 GMT. Canadian Building Permits made a huge leap 4 months ago and returned to normal since then. After a fall of 4.9%, permits are predicted to rise by 2.1%, boosting the Canadian dollar. This figure always rocks the currency.
- Ivey PMI: Published on Wednesday at 14:00 GMT. The Richard Ivey school of business showed that the Canadian industry is expanding in the past 2 months. This important survey of 175 purchasing managers is now expected to rise from 51.9 to 55.1 points.
- John Murray talks: Starts speaking on Wednesday at 20:00 GMT. BOC deputy governor Murray is an influential member of the central bank, and may hint something about the rates, given the improving situation of the Canadian economy. He’ll speak in Washington DC.
- Employment data: Published on Friday at 11:00 GMT. The Canadian unemployment rate unexpectedly fell to 8.2% last month, the lowest in 10 month. It’s now predicted to remain unchanged. The other figure, employment change, is expected to show a gain of 25,200 jobs, more than last month’s gain of 20,900. Last month’s job figures pushed USD/CAD below 1.02. Will we see parity this time?
USD/CAD Technical Analysis
The pair began a steady descent at the beginning of the week, and bounced at 1.0067, similar to the same area two weeks ago. I’ve marked this double bottom as a new support line on the way to parity. USD/CAD eventually closed at 1.0110.
Some lines have been added to last week’s outlook. Looking down, below 1.0060, parity is the ultimate support line. This line can be approached towards the end of the week. Below 1, the next support line is at 0.98.
Looking up, 1.02 is the immediate resistance line, although its role is smaller. 1.03 was a swing high two weeks ago, and is another minor resistance line.
Above, 1.04 is already an important resistance line, serving as a support and resistance line many times in recent months. Far in the horizon, 1.0780 is an important resistance line, but that’s far now.
I am bearish on USD/CAD.
The price of oil and the growing economy continue to support this currency. More good news from the job market could finally make the Canadian and American dollars equal.
Further reading:
- For a broad view of all the week’s major event in all currencies, read the forex weekly outlook.
- For the Euro, read the EUR USD Forecast.
- For the British Pound, look into the GBP/USD forecast.
- For the Australian dollar, read the AUD/USD forecast.
- For USD/CAD, check out the Canadian dollar forecast.
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