The Canadian dollar reversed directions last week, posting weekly gains for the first time in 2014. USD/CAD dropped close to a cent, closing the week with slight losses at 1.1030. This week’s key event is Manufacturing Sales. Here is an outlook on the major events and an updated technical analysis for USD/CAD. The Canadian dollar flexed some muscle on Friday, as Canadian Employment Change hit a five-month high and easily beat the estimate. Over in the US, employment numbers were a mix, as Unemployment Claims were solid, but Nonfarm Payrolls slid. PMIs were also mixed last week. [do action=”autoupdate” tag=”USDCADUpdate”/]USD/CAD daily chart with support and resistance lines on it. Click to enlarge: Housing Starts: Monday, 13:15. Housing Starts has been losing ground in recent releases and dropped to 190 thousand last month, shy of the estimate of 196 thousand. The downward trend is expected to continue, with the January standing at 184 thousand. BOC Deputy Governor John Murray Speaks: Monday, 17:50. Murray will address the Chamber of Commerce in Sudbury. Analysts will be looking for clues as to the BOC’s future monetary policy. Annual Budget Release: Tuesday, 21:00. The federal government’s budget is highly anticipated by the markets and should be treated as a market-mover. This release can have a major impact on the movement of USD/CAD, especially if there are aspects to the budget that were not expected by the markets. New Housing Price Index: Thursday, 13:30. This housing inflation index is an important gauge of activity in the Canadian housing sector. The index has showed little or no gain in recent releases, and the previous reading came in at a flat 0.0%. A slight improvement is expected in the January release, with an estimate of 0.2%. Manufacturing Sales: Friday, 13:30. Manufacturing Sales is the highlight of the week. The indicator has posted to straight gains of 1.0%, easily beating the estimates. The markets are bracing for a downturn for January, with an estimate of 0.3%.Will the indicator again beat the prediction? *All times are GMT. USD/CAD Technical Analysis USD/CAD opened the week at 1.1124 and quickly touched a high of 1.1133. The pair then pushed lower for the remainder of the week, breaking below the key 1.10 line and dropping to a low of 1.0967, as support held at 1.0945 (discussed last week). The pair closed the week at 1.1030. Live chart of USD/CAD: [do action=”tradingviews” pair=”USDCAD” interval=”60″/] Technical lines, from top to bottom: We begin with resistance at 1.1617. This line marked a high point for the pair in July 2009, at which time the Canadian dollar posted a rally in which USD/CAD dipped below the 0.94 line. 1.1535 provided key support back in early 2007. It has been a resistance line since July 2009. 1.1369 fell in October 2008 as the US dollar posted sharp gains, climbing as high as the 1.21 level. 1.1124 is the next line of resistance. It has some breathing room as the Canadian dollar improved last week. The key psychological barrier of 1.10 is the first support line. It was breached at the end of the week but the loonie failed to hold onto these gains and closed the week slightly above this line. Will USD/CAD break below 1.10 again this week? 1.0945 is providing strong support and has remained intact since mid-January. 1.0853 is the next support line. 1.0723 was a cap in mid-2010, before the US dollar tumbled and dropped all the way into 0.93 territory. It remains a strong support line. 1.0660 saw a lot of activity in the second half of December and continues to provide strong support. The final support line for now is 1.0523. It was a peak back in November 2011 and has provided support since late November 2013. I am bullish on USD/CAD The Canadian dollar had a good week, but is still down about 4 cents since the start of the year. With the Federal Reserve continuing with its taper of QE, the greenback could move higher. Canada’s annual budget will be released, and with a sputtering economy weighed down by very low inflation, any bad news in the budget could send the loonie southward. 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. Kenny Fisher Kenny Fisher Kenny Fisher - Senior Writer A native of Toronto, Canada, Kenneth worked for seven years in the marketing and trading departments at Bendix, a foreign exchange company in Toronto. Kenneth is also a lawyer, and has extensive experience as an editor and writer. Kenny's Google Profile View All Post By Kenny Fisher Canadian Dollar ForecastMinorsWeekly Forex Forecasts share Read Next GBP/USD Outlook Feb. 10-14 Kenny Fisher 9 years The Canadian dollar reversed directions last week, posting weekly gains for the first time in 2014. USD/CAD dropped close to a cent, closing the week with slight losses at 1.1030. This week's key event is Manufacturing Sales. Here is an outlook on the major events and an updated technical analysis for USD/CAD. The Canadian dollar flexed some muscle on Friday, as Canadian Employment Change hit a five-month high and easily beat the estimate. Over in the US, employment numbers were a mix, as Unemployment Claims were solid, but Nonfarm Payrolls slid. PMIs were also mixed last week. 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