The Canadian dollar made a significant move at the end of the week, and approaches parity with the US dollar. 6 events will shape the direction of the loonie, with the most important ones kept for Friday. Here’s an outlook and an updated technical analysis for USD/CAD, now on lower ground. USD/CAD chart with support and resistance lines marked. Click to enlarge: Canada’s unemployment rate fell again, surprising analysts. Although it wasn’t too far from early expectations, this gave the loonie the necessary push. Inflation and retail sales promise another action-full Friday for the Canadian dollar. Let’s start: Labor Productivity: Published on Tuesday at 12:30 GMT. This is a quarterly release, hence its importance. In the previous quarter, productivity fell – this means that workers got more for their work – pushing prices higher. A small rise in productivity is predicted this time. A lower figure is better for the loonie. Manufacturing Sales: Published on Tuesday at 12:30 GMT, and overshadowed by the previous release. Sales have risen in the past 4 months, but last time they rose in a smaller scale than expected. This figure provides a good reflection of the Canadian economy – steady growth. It’s expected to rise modestly this time. Wholesale Sales: Published on Wednesday at 12:30 GMT. Zooming out to the wholesaler level, we’ve seen a similar picture: 4 months of small rises. Last month’s 0.7% growth is predicted to be followed by a similar rise this time, supporting the loonie. Foreign Securities Purchases: Published on Thursday at 12:30 GMT. In the past two months, foreigners have shown growing confidence in the Canadian economy: a net purchase of over 10 billion was reported. This time, the net figure is expected to be under 10 billion. CPI: Published on Friday at 11:00 GMT. This is a key figure for raising the rates. Without prices pressure, there’s no urge to raise the rates. Three months ago, prices picked up in Canada, but they dropped afterwards, returning to stability. A rise of 0.4% is expected in consumer prices, and a rise of 0.3% in Core CPI, which is closely watched by the central bank. Retail Sales: Published on Friday at 12:30 GMT. Just 90 minutes after the CPI release, another important indicator is due. Retail sales are expected to rise by 0.6% after the 0.4% rise last time, and core retail sales are predicted to rise by 0.5%. Consumer confidence, seen in sales volume, is important for pushing the Canadian dollar higher. USD/CAD Technical Analysis After breaking below 1.04 almost two weeks ago, USD/CAD continued south, very slowly, and on Friday managed to break the stubborn 1.02 line. Lower lines have been added on last week’s outlook. USD/CAD is now bound between 1.02 and and parity – 1.0000. Looking up, 1.04 is the next line of resistance, serving as both a support and a resistance line many times in the past. Above, 1.0780 is the border of the range that characterized the loonie for a long time. Even higher, 1.0850 is the next line of resistance. Looking down, parity is the ultimate round number. It also was a technical barrier in the past. USD/CAD will probably struggle with this line. Over the cliff, the next line below is 0.98, which was a support line back in the summer of 2007. Even lower, 0.97 is the next line of support. I remain bearish on USD/CAD. As seen in the last employment figures, the Canadian economy is in the right direction, and supports a stronger currency. Reaching parity with the greenback is a big challenge though. 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 GBP/USD forecast. For the Australian dollar, read the AUD/USD forecast. For USD/CAD, check out the Canadian dollar forecast. Want to see what other traders are doing in real accounts? Check out Currensee. It’s free. Yohay Elam Yohay Elam Yohay Elam: Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I've accumulated. After taking a short course about forex. Like many forex traders, I've earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I've worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts. Yohay's Google Profile View All Post By Yohay Elam Canadian Dollar Forecast share Read Next EUR/USD Outlook – March 15-19 Yohay Elam 12 years The Canadian dollar made a significant move at the end of the week, and approaches parity with the US dollar. 6 events will shape the direction of the loonie, with the most important ones kept for Friday. Here's an outlook and an updated technical analysis for USD/CAD, now on lower ground. USD/CAD chart with support and resistance lines marked. Click to enlarge: Canada's unemployment rate fell again, surprising analysts. Although it wasn't too far from early expectations, this gave the loonie the necessary push. Inflation and retail sales promise another action-full Friday for the Canadian dollar. 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