USD/CAD dipped into lower ground in the past week. The rate decision, BOC Press Conference, inflation data and retail sales are the highlights of a busy week. Here’s an outlook for the Canadian events, and an updated technical analysis for USD/CAD. Last week Canadian housing starts rose unexpectedly amid strong sales activity in Ontario reaching 197,400 new building starts following 194,000 inthe previous month. The prosperous housing market continues to thrive despite the restrictions on mortgage lending issued at the beginning of 2011. USD/CAD daily chart with support and resistance lines on it. Click to enlarge: Let’s Start: Foreign Securities Purchases: Monday, 12:30. Foreign investors continued to buy Canadian securities totaling $8.2 billion in April and following 6.44 billion in the previous month. A decrease to $7.41 billion is forecasted. Rate decision: Tuesday, 13:00. The Bank of Canada maintained its target overnight rate at 1% due to a gradual recovery in the global economy and in the Canadian market expansion. However announced in its last rate statement it would closely monitor inflationary pressures to decide upon a possible rate hike. Overnight Rate is expected to be maintained this time. Leading Index: Wednesday, 12:30. Canada’s leading indicator rose 1.0% in May doubling expectations after increasing 0.9% in the previous month. The increase was led by high demand from the aircraft industry to manufacturers. A further increase of 1.2% is predicted. Wholesale Sales: Wednesday, 12:30. Canadian Wholesale Sales decreased in April by -0.1 after 0.3% gain in March but contrary to analysts’ expectations of 0.3% drop. Sales have been sluggish in the first half of 2011 compared to the second half of2010. A gain of 0.2% is forecasted. BOC Monetary Policy Report: Wednesday, 14:30. The BOC Monetary Policy Report issued in April reveals a better than expected growth rate in economic activity towards the end of 2010. GDP increased by 3.3% in the 4th quarter of 2010. Increasing commodity prices had resulted in large rises inCanada’s terms of trade leading to a renewed growth in real gross domestic income expecting CPI inflation to reach 3% in the second quarter of 2011. BOC Press Conference: Wednesday, 15:15. A temporary climb in exports and consumer spending gave boost to the economy in early 2011, howeverCanada’s central bank expects growth will slow in the months ahead due to supply shortage caused byJapan’s March 11 disaster and a stubbornly high loonie adding hardship to Canadian businesses. Inflation data: Friday, 11:00. Canadian consumer price index increased by 0.7% in May following 0.3% gain in the prior month. Meantime Core CPI increased by 0.5% well above the 0.2% rise expected indicating inflationary pressures. CPI is expected to drop 0.2% and Core rates are expected to be flat this time. Retail sales: Friday, 12:30. Canadian retail sales gained only 0.3% in April after 0.6% rise was predicted and Core retail sales were flat. The lukewarm readings disappointed analysts each month since December2010. A drop of 0.3% is anticipated in retail sales while a 0.2% gain is predicted in the core figures. *All times are GMT. USD/CAD Technical Analysis The Canadian dollar started the week retreating (cadusd falling). USD/CAD temporarily breached the 0.9750 line (mentioned last week), but this was short lived. It then changed direction and fell as low as 0.9550 before bouncing. Technical lines, from top to bottom: Distant and minor resistance, above parity, 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, and is now further in the distance. 0.9816 capped the pair over and over again, but after temporarily failing to hold three weeks ago. It is somewhat weaker. 0.9750 was a very distinctive line earlier, separating ranges in a great way. The break above this line just now was temporary and short lived. 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, including a very recent one. 0.96 was a minor support line that played a role earlier in the year. After being broken, it worked very well as resistance. The same scenario repeated itself more than once. More important support is at 0.9520 – it worked as support and also as minor resistance during April. It was really challenged now. 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 bearish on USD/CAD. The prices of oil refuse to fall, no matter what, in this helps the loonie. More importantly, Canadian jobs are on the rise, and this is significant for the loonie. While the US economy is still dragging its legs, the low chance of QE3 also indirectly helps the Canadian dollar. 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 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 Forex Daily Outlook – July 18 2011 Anat Dror 11 years USD/CAD dipped into lower ground in the past week. The rate decision, BOC Press Conference, inflation data and retail sales are the highlights of a busy week. Here's an outlook for the Canadian events, and an updated technical analysis for USD/CAD. Last week Canadian housing starts rose unexpectedly amid strong sales activity in Ontario reaching 197,400 new building starts following 194,000 inthe previous month. The prosperous housing market continues to thrive despite the restrictions on mortgage lending issued at the beginning of 2011. USD/CAD daily chart with support and resistance lines on it. 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