The Canadian dollar fell against the USD for another week, after putting up a fight. Many interesting events are up this week with the rate decision, employment data and housing figures. Here’s an outlook for the Canadian events and an updated technical analysis for the Canadian dollar. Falling oil prices and the run to the US dollar (despite weak job figures) weigh on the loonie, but things aren’t too good at home either. Canada’s economy expanded by 0.1% in March following a 0.2% contraction in February, in light of improvement in the manufacturing and construction sectors. However the rise was less than the 0.4% growth rate predicted by analysts. Updates: GDP improved in May, increasing 0.1%. However, this was well below the market forecast of 0.4%. Building Permits and the central bank’s interest rate decision will be published on Tuesday. USD/CAD broke above the 1.04 level in the Asian session, but then retraced. The pair was trading at 1.0381. The markets are not expecting any change to the key Overnight Rate. The rate has been at 1.0% since 2010. The loonie continues to weaken, as USD/CAD pushed above the 1.04 line. The pair was trading at 1.0404. Building Permits plummeted by 5.2%, surprising the markets, which had forecast a very slight drop of 0.3%. The central bank held the line on interest rates, maintaining rates at 1.0%. The loonie improved following a Rate Statment from the central bank, which was less dovish than expected. USD/CAD was trading at 1.0331. The Canadian dollar continued to improve, as USD/CAD pushed below the 1.03 line. The pair was trading at 1.0261. Canadian PMI, a key indicator will be released later on Thursday. USD/CAD daily chart with support and resistance lines on it. Click to enlarge: Building Permits: Tuesday, 12:30. The value of Canadian building permits surged unexpectedly in March climbing 4.7% to C$6.5 billion ($6.5 billion) following 7.6% increase in February. However despite the encouraging number of building starts there is a slowdown in residential construction, indicating home building may be sluggish in the months ahead. Another rise of 2.3% is anticipated this time. Rate decision: Tuesday, 13:00. The Bank of Canada Board decided to maintain the overnight rate at 1.0% and calling for less stimulus in the future, in light of the recent encouraging economic figures. GDP growth in 2012 is estimated at 2.4% surpasses the 2.0% forecast made in January. Inflation is due to drop to the 2.0% target only by the second quarter of 2013.No change is expected now. Ivey PMI: Thursday, 14:00. The Canadian Ivey Purchasing Managers Index dropped more than expected in April to 52.7 from63.5 in March, on a seasonally adjusted basis, coming in below economists’ estimate of 62.6 still indicating expansion. A small decline to 51.8 is predicted now. Housing Starts: Friday, 12:15. Canadian housing starts edged up beyond expectations to 244,900 units after 214,800 units in March. The rise was led by a surge in construction of condominiums. Economists expected a decline to 204,000. This boost in housing starts raises concerns among the finance ministry and the Bank of Canada regarding the possibility of an economic catastrophe in case home buyers will not be able to keep up with rising payments once the rates climb above the current minimum level. Bank of Canada Governor Mark Carney sees household debt as the biggest domestic risk to the Canadian economy. Another increase to 249,000 is expected this time. Employment data: Friday, 12:30. The Canadian job market continued to improve with another impressive addition of 58,200 in April following 82,300 in March way above the 10,000 increase anticipated by analysts. This is the biggest two-month employment gain in more than 30 years suggesting possible rate hikes in the near future. However despite the surprising job gain, unemployment rate actually rose to 7.3% from 7.2% in March since more people were looking for work as a result of the increase in Job offers. Trade Balance: Thursday, 12:30. The value of Canada’s imports and exports declined in March amid lower energy prices, however growing export volumes is a good sign for the Canadian economy. March trade surplus reached to C$351 million ($351 million) from $273 million in February but lower than the C$700 million anticipated by analysts. Labor Productivity: Friday, 12:30. The labor productivity in Canadian businesses climbed by 0.7% in the fourth quarter of 2011 amid a continuous growth in production. The increase was larger than the 0.6% rise predicted by economists indicating the labor market continues to improve. * All times are GMT. USD/CAD Technical Analysis $/C$ began the week with a slide towards the 1.02 line (mentioned last week) before rising back up. After a struggle with 1.02, the pair made a convincing break and even temporarily crossed 1.04 before settling a bit lower. Technical lines, from top to bottom: We move higher once again. 1.10 is a round number and also served as resistance back in 2009. s1.0850 was last seen in 2010, but has been very persistent as a cap for the loonie. 1.0750 was the peak of ranges several times in the past few years, and is a very important line. 1.0660 was last seen in September 2011, but this line was also a long running swing high several times beforehand. 1.0523 was a peak back in November and is minor resistance. 1.0423 is the high line that capped the pair towards the end of 2011 and now turns into key resistance. The round number of 1.03 was resistance at the beginning of the year and now switches positions to key support. 1.0245 served as a separator for the move up when the pair rallied in May 2010 but is weaker now. 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 after being broken. 1.0150 was a swing low in September and worked as resistance several times afterwards. 1.0050 was tough resistance in April 2012 and also in May. Very close by, 1.0030 capped the pair twice in March 2012 but is weaker now after working only temporarily in May. The very round number of USD/CAD parity is a clear line of course, and the battle is renewed after the recent climb. Under parity, we meet another pivotal line at 0.9950. It served as a top border to range trading in March 2012 and later as a line in the middle of the range. 0.99, the round number is now present on the graph after capping the pair in May 2012. 0.9840 provided support for the pair during September and was reduced to a minor line now. I am bullish on USD/CAD. Too many things are weighing against the Canadian dollar: US weakness, oil prices and also European events. While there might be some room for correction after the recent falls, we also might see a correction in Canadian job figures and a dire statement from the BOC, which can send the loonie lower and USD/CAD higher. Also from a technical perspective, the recent breakout provides more ammunition for the bulls. 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 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 USD/JPY Outlook June 4-8 Anat Dror 10 years The Canadian dollar fell against the USD for another week, after putting up a fight. Many interesting events are up this week with the rate decision, employment data and housing figures. Here's an outlook for the Canadian events and an updated technical analysis for the Canadian dollar. Falling oil prices and the run to the US dollar (despite weak job figures) weigh on the loonie, but things aren't too good at home either. Canada's economy expanded by 0.1% in March following a 0.2% contraction in February, in light of improvement in the manufacturing and construction sectors. 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