The Canadian dollar partially enjoyed the rise in oil prices. It could backfire and hit the US economy, Canada’s No. 1 trade partner. GDP is the highlight event this week. Here’s an outlook for the Canadian events and an updated technical analysis for USD/CAD. Last week, retail sales dropped 0.2% in December posing the first decline in five months due to a sluggish holiday shopping and a slowdown in the automobile industry. The decline was in line with predictions following 0.4% gain in November. Meanwhile, Core sales remained flat in December, slower than the 0.1% rise predicted by analysts. Will things shape up this week? Updates: The loonie has benefited from some weakness in the US dollar, and is looking to stay above the important parity level. With oil prices moving upwards, the Canadian dollar could continue to rally. GDP is the big release of the week. USD/CAD is under parity once again. This line is still fought over. The loonie follows US releases in a stronger manner than Greek news. The Canadian dollar dropped to the 0.99 level, as US manufacturing and consumer confidence numbers were both stronger than expected. The loonie rallied after Beranke’s testimony, trading at 1.0115. USD/CAD daily chart with support and resistance lines on it. Click to enlarge: Current Account: Thursday, 13:30.Canada’s current account deficit contracted considerably in the third quarter amid higher exports reaching a deficit of C$12.13 billion from a revised C$16.14 billion in the previous quarter. Exports expanded by C$4.68 billion the highest in three years. However economists expect deficit to grow again due to the global uncertainty. Another contraction to a deficit of C$9.4billion is expected now. RMPI : Thursday, 13:30. The IPPI decreased 0.7% in December following a 0.3% gain in November mainly due to a sharp decline in energy prices. The relative strength of the Canadian Dollar against the USD in December also contributed to the drop. Meanwhile, the raw materials price index fell 2.4% following 3.8% rise the previous month. RMPI is predicted a 0.6% drop while IPPI is forecasted to gain 0.2%. GDP: Friday, 13:30.Canada’s economy shrank 0.1% in November amid a drop in oil and gas extraction following a flat reading in October. This decline was contrary to the 0.2% growth predicted by analysts. Nevertheless economists believe that the Canadian economy is on a growth trend. GDP is expected to expand 0.3%. * All times are GMT. USD/CAD Technical Analysis Dollar/CAD dropped lower at the beginning of the week, but eventually bounced off the 0.99 line (mentioned last week). It returned to a struggle with parity and finally closed just below this magical number. Technical lines, from top to bottom: 1.0550 was a minor cap back in September, when the pair traded higher. The round number of 1.05 had the same role during a surge in November. 1.0440 provided support when the pair was trading at higher ground during November and was tested successfully also in December, making it stronger. 1.0360 capped the pair in September and October and also provided support. It is weaker now. The round number of 1.03 was the peak of a move upwards seen in November 2010 and has found new strength after working as a cap in January 2012. 1.0263 is the peak of surges during October, November and December, but was shattered after the move higher. The break above this line proved to be short lived, and it returned to the previous strength. The round figure of 1.02 was a cushion when the pair dropped in November, and also the 2009 trough. It is weaker now but remains pivotal. 1.0143 was a swing low in September and worked as resistance several times afterwards. It is a strong line of resistance and should be watched on every move higher. The failure to break it marked the collapse of the pair. 1.0070 was a trough more than once in November, December and January. It worked as a very strong cap also in February 2012. The very round number of USD/CAD parity is a clear line of course, and was a line of battle that eventually saw the pair fall lower. Under parity, the round number of 0.99 provided support on a fall during October and also served as resistance back in June. In February 2012, the pair fell short of challenging it. 0.9830 provided support for the pair during September and is a minor line on the way down. 0.9780, where the current run began is the next and important support line. It is closely followed by 0.9736, which provided support during August 2011. The veteran 0.9667 line worked as support at the beginning of 2011 and then for several months during the spring. It is a very clear and strong line on the chart. 0.9550 worked as support during April and also June and is minor now. 0.9406 was the trough in July 2011 and is the final frontier for now. Below this line, its back to 2007. I remain neutral on USD/CAD. Higher oil prices are a double-edged sword. On one hand, Canada exports the black gold, but as taxes are low on fuel in the US, every change in global prices has an immediate impact on consumers and on the economy. Canada is dependent on the strength of the US economy. Also the ongoing debt crisis could weigh on the loonie, but the timing of this eruption of this ongoing crisis is unknown. Nevertheless, there are speculations of a Greek default on March 23rd. 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 Zealand Dollar (kiwi), read the NZD forecast. For USD/CAD (loonie), check out the Canadian dollar forecast For the Swiss Franc, see the USD/CHF forecast. Anat Dror Anat Dror Anat Dror â€“ 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. Iâ€™ve also worked as a community organizer Anat's Google Profile View All Post By Anat Dror Expert score 5 Etoro - Best For Beginner & Experts0% Commission and No stamp DutyRegulated by US,UK & International StockCopy Successfull Traders 5 Read Review Open My Free Account Your capital is at risk. Canadian Dollar ForecastMinors share Read Next EUR/USD Outlook Feb. 27 – Mar. 2 2012 Yohay Elam 10 years The Canadian dollar partially enjoyed the rise in oil prices. It could backfire and hit the US economy, Canada's No. 1 trade partner. GDP is the highlight event this week. Here's an outlook for the Canadian events and an updated technical analysis for USD/CAD. Last week, retail sales dropped 0.2% in December posing the first decline in five months due to a sluggish holiday shopping and a slowdown in the automobile industry. The decline was in line with predictions following 0.4% gain in November. Meanwhile, Core sales remained flat in December, slower than the 0.1% rise predicted by analysts. 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