Looking for the latest outlook for this week? Check the full section: Canadian Dollar Forecast
The Canadian dollar also lost ground to the greenback, but didn’t lose any important lines. The upcoming week provides important job figures among other indicators. Here’s an outlook for the Canadian dollar and an updated technical analysis for USD/CAD.
USD/CAD chart with support and resistance lines marked on it. Click to enlarge:
American GDP was excellent, but lucky for Canada, also its monthly GDP was published at the same time and it exceeded early expectations, rising by 0.4% and enjoying an upwards revision of the previous month’s number. Let’s start the review. The technical analysis will follow:
- Building Permits: Published on Thursday at 13:30 GMT. Canada’s permits made a huge leap of 18% two months ago, and this resulted in a “hangover” last month – a drop of 4.6%. This figure is important for the whole economy and it’s predicted to rise by 3.3% this time.
- Ivey PMI: Published on Thursday at 15:00 GMT. The Richard Ivey Business School has has a reputable gauge of the economy, that tends to shake the economy. After making excellent gains and reaching 61.7 points, the last two months have seen a speedy deterioration, with a drop to 48.4 points last month. A score below 50 means economic contraction – loonie negative. It’s predicted to lift its head up above 50 – to 51.3 points.
- Mark Carney talks: His speech begins at Winnipeg on Thursday at 18:45 GMT. The head of the central bank disappointed with an unchanged interest rate policy last month. This significantly hurt the loonie, and USD/CAD eventually rose above 1.04, and continued north. He’ll have a chance to say something positive in this speech.
- Employment Data: Published on Friday at 12:00 GMT, 90 minutes before the American NFP. Canada’s job market is improving gradually. Two months ago, we’ve seen a rise of almost 80,000 jobs, which was superb. The Employment Change figure slightly disappointed last month with a drop of 2,600 jobs. The Unemployment Rate figure has been more stable, easing from 8.6% to 8.5% two months ago, and remaining stable last month. It seems that the situation is stabilizing, after many swings in previous months. A rise of 15,300 jobs is predicted now. The Unemployment Rate is expected to remain unchanged.
USD/CAD Technical Analysis
After losing the 1.04 line last week, USD/CAD traded through a significant portion of the 1.04-1.0750 range, mostly between 1.0530 to 1.07, closing at 1.0704.
The lines haven’t changed from last week’s outlook. As aforementioned, 1.0750 is a strong resistance resistance line. Above this line, 1.0850 was the previous peak, and serves as a minor resistance line.
If the greenback continues to rally, the next line of resistance is 1.1130, a line that was successfully tested several times in 2009.
Looking down, 1.0530 is a very minor support line inside the range. 1.04 is a major line, followed by 1.02 – the bottom of the previous line and the 2009 low. Parity is lower, but too far…
I turned bearish on USD/CAD
The Canadian economy weathered this greenback storm in a nice manner, and has a strong resistance line to defend it. I believe that it won’t lose this range, and that the Canadian employment numbers will get the pair to lower areas of the range.
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 GBP/USD, look into the British Pound forecast.
- For the Australian dollar, read the AUD/USD forecast.
- For USD/CAD, check out the Canadian dollar forecast.
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