Market moving events await us this week with Housing starts, BOC business outlook survey and the Trade balance. Here’s an outlook for the Canadian events, and an updated technical analysis for the Canadian dollar Last week did not end on a positive note for the Canadian market despite better than expected figures in housing, Manufacturing and employment sectors. Building permits leaped an amazing 20.9% following 21.5% drop in April while a gain 5.1% was forecasted, Ivey PMI reflecting business conditions also increased more than predicted to 68.2. These positive readings indicate a genuine recovery for the Canadian economy, but the problems of the US economy weigh on the Canadian dollar as well. USD/CAD daily chart with support and resistance lines on it. Click to enlarge: Housing Starts: Monday, 12:15. Canadian housing starts increased in May to 184,000 units from179,000 in the previous month in line with expectations led by a pick up in multi-family buildings.Canada’s housing industry played a major role in pulling Canadian economy out of the recent recession. However the expected growth rate is expected to be modest. A small drop to 182,000 units is expected. BOC Business Outlook Survey: Monday, 14:00. The last business outlook survey in April revealed an improved business climate and growth in the labor market but fear of inflation in commodity prices. Trade Balance: Tuesday, 12:30. Trade balance deficit increased by 0.5B to 0.9B in April exports decreased by 1.9%. The major factors for the increase in deficit were automobile and energy products. This reading was contrary to expectations of 0.4B surplus. A decrease to 0.8B is predicted now. Manufacturing Sales: Friday, 12:30. Manufacturing sales inCanada dropped by 1.3% to C$46.7 billion in April, diminishing the 1.9% increase in March. The major cause for the decrease was the transportation equipment industry affected by Japan’s March 11 catastrophes. A small drop of -0.3% is predicted. *All times are GMT. USD/CAD Technical Analysis Dollar/CAD began choppily traded upwards at the wake of the week, but was clearly capped by the 0.9667 line (discussed last week). It then made a sharp drop and traded under 0.96 before closing higher on a mad Friday. Technical lines, from top to bottom: Distant and minor resistance appears above parity, at 1.0060. This was the highest level in 2011 and is getting further away. The very round number of USD/CAD parity is the obvious line below, although it isn’t too strong. Under parity, we have two close lines – 0.9977, which was a trough in 2010, was also tested at the beginning of March and proved to be significant. The 2009 low of 0.9930 is just beneath, now weaker than earlier, but getting very close now. 0.9816 capped the pair over and over again, but after temporarily failing to hold two weeks ago. It is somewhat weaker. 0.9750 was a very distinctive line earlier, separating ranges in a great way. The break below this line pushed the pair significantly lower. 0.9667 was a cushion in March and later worked as resistance. This line provided support a few weeks ago, and had an important role in holding back recovery attempts. The most recent example was this week. 0.96 was a minor support line that played a role earlier in the year. After being broken, it worked very well as resistance. More important support is at 0.9520 – it worked as support and also as minor resistance during April. 0.9450 was a double bottom just now and is very important – it’s the new 2011 low. Below this line, we have lines last seen in 2007 – 0.92 is notable, as well as the historic low of 0.9056. I am neutral on USD/CAD. The prices of oil have stabilized and play a smaller role now. More importantly, Canadian jobs are on the rise, and this is significant for the loonie. On the other hand, the very weak Non-Farm Payrolls in the US are a problem for Canada. Without US strength, the Canadian dollar cannot rise. 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 Zealanddollar (kiwi), read the NZD forecast. For USD/CAD (loonie), check out the Canadian dollar For the Swiss Franc, see the USD/CHF forecast. USD/CAD (loonie), check out the Canadian dollar. Anat Dror Anat Dror Anat Dror 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. I've also worked as a community organizer Anat's Google Profile View All Post By Anat Dror Canadian Dollar ForecastMinors share Read Next $5 Trillion A Day During the Summer – Forex Trading Yohay Elam 11 years Market moving events await us this week with Housing starts, BOC business outlook survey and the Trade balance. Here's an outlook for the Canadian events, and an updated technical analysis for the Canadian dollar Last week did not end on a positive note for the Canadian market despite better than expected figures in housing, Manufacturing and employment sectors. Building permits leaped an amazing 20.9% following 21.5% drop in April while a gain 5.1% was forecasted, Ivey PMI reflecting business conditions also increased more than predicted to 68.2. 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