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The Canadian dollar had a dreadful week, shedding about 250 points against the US currency. USD/CAD  climbed close to the 1.10 level and closed the week at 1.0887. The upcoming week  has a very light schedule, with just two releases.

US employment numbers started off the week strongly, as ADP Non-Farm Payrolls and Unemployment Claims looked sharp. However, Friday’s NFP of just 74 thousand was a two-year low, and hurt the loonie as investors scurried to the safe-haven US dollar. Canadian key releases didn’t do the loonie any favors last week, as Ivey PMI and Building Permits both slipped badly.

[do action=”autoupdate” tag=”USDCADUpdate”/]

USD/CAD daily chart with support and resistance lines on it. Click to enlarge:     USD CAD Forecast Jan. 13-17

  1. BOC Business Outlook Survey:  Monday, 13:30. This report is issued by the Bank of Canada each quarter. The survey covers about 100 businesses who are asked for their view on a wide range of business conditions, including spending, hiring and credit expectations. The indicator can affect the movement of USD/CAD.
  2. Foreign Securities Purchases:  Thursday, 13:30. This indicator is closely related to currency demand, as foreigners need to purchase Canadian dollars in order to buy domestic securities. In November, the indicator tumbled to 4.41 billion dollars, down from 8.36 billion in the previous reading. This was nowhere near the estimate of 9.24 billion. The markets are expecting a strong improvement for the December release, with an estimate of 7.21 billion.

*All times are GMT.


USD/CAD Technical Analysis

USD/CAD opened the week at 1.0632 and  quickly touched the weekly low of 1.0609. It was all uphill from there, as the pair climbed as high as 1.0946, just above  resistance at 1.0945 (discussed last week). The pair  could not  consolidate at  these levels and  closed the week at 1.0887.

Live chart of USD/CAD: [do action=”tradingviews” pair=”USDCAD” interval=”60″/]


Technical lines, from top to bottom:

We  begin at high levels as USD/CAD has posted sharp gains:

There is resistance at 1.1369. This line fell in October 2008 as the US dollar posted huge gains, climbing as high as the 1.21 level. It has remained intact since July 2009. 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.

1.0853 could not hold back the surging US dollar last week, and has switched to a support role. It is a weak line and could see some activity early in the week.

1.0723 was a cap in mid-2010, before the US dollar tumbled and dropped all the way into 0.93 territory. It starts off the week as a strong support line.

1.0660 was breached early in the week as the loonie took a tumble. It saw a lot of activity in the second half of December.

1.0523 was a peak back in November 2011  and has provided support since late November.

1.0446 has held since mid-November, when the US dollar continued a rally which saw it break above the 1.07 line.

The final support line for now is 1.0340, which  had a busy October.


I am  bullish on USD/CAD

The Canadian dollar has been under pressure, and the roof finally caved in last week. With more QE expected from the Federal Reserve and the Canadian economy continuing to struggle, there’s more room for the pair to move upwards.

Further reading: