USD/CAD posted modest gains last week, as the pair closed just above the 1.07 line. This marked the first time the pair has closed the trading week above 1.07 in over four years. There are no releases this week, as we begin 2014 on a quiet note. Here is an outlook on the major market-movers and an updated technical analysis for USD/CAD.
The only Canadian release this week, GDP, beat the estimate for a third straight month. In the US, strong Unemployment Claims and New Home Sales releases helped the US dollar gain ground late in the week at the expense of the Canadian currency.
[do action=”autoupdate” tag=”USDCADUpdate”/]USD/CAD daily chart with support and resistance lines on it. Click to enlarge: 
USD/CAD Technical Analysis
USD/CAD opened the week at 1.0643 and touched a low of 1.0582. The pair then reversed directions, and pushed above the 1.07 line for the second week in a row. USD/CAD touched a high of 1.0718, as resistance at 1.0723 (discussed last week) held firm. The pair closed the week at 1.0703.
Live chart of USD/CAD: [do action=”tradingviews” pair=”USDCAD” interval=”60″/]
Technical lines, from top to bottom:
We start with resistance at 1.1219. This line has remained intact since July 2009, when the Canadian dollar showed sharp volatility, trading as high as the 1.17 level. This is followed by resistance at 1.1124.
The next resistance line is 1.0945, which is protecting the key 1.10 level. This line has not been tested since September 2009.
Next is resistance at 1.0853. This line has held firm since May 2010.
1.0723 was a cap in mid-2010, before the US dollar tumbled and dropped all the way into 0.93 territory. This line faced pressure for the third straight week. The pair was unable to break through and this line remains in a resistance role, albeit a weak one.
1.0660 has had a busy December and was easily breached by the pair. It has reverted to a support line.
1.0523 was a peak back in November 2011. This line has some breathing room as the USD/CAD trades at higher levels.
1.0446 has held since mid-November, when the US dollar continued a rally which saw it break above the 1.07 line.
1.0340 had a busy October and is providing strong support. 1.0250 is next. This line has held firm since mid-September.
1.0180 provided support for the pair during March, and saw a lot of activity in the first half of June. It remains a strong support line.
The final support line is at 1.01. It was a trough back in July 2012 and switched to resistance afterwards. The line proved its strength several times in 2013, most recently in mid-May.
I am bullish on USD/CAD
The Canadian dollar remains under pressure as USD/CAD begins the week above the 1.07 line. With further QE tapers expected early in 2014, we could see the US dollar continue to strengthen.
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.
- USD/CAD (loonie), check out the Canadian dollar.
Share
