The Canadian dollar had an interesting week, retreating to a 3 month low against the greenback but eventually closing almost at the same place. Building Permits, Ivey PMI and Trade Balance are the highlights of this week Here is an outlook on the major market-movers and an updated technical analysis for USD/CAD. The Canadian economy disappointed in August with a contraction of 0.1%, significantly worse than the 0.2% growth anticipated, amid a decrease in production. Nevertheless, Finance Minister Jim Flaherty said Canada’s economic growth remains elevated despite this weak reading in August. Also job gains fell short of expectations with only 1.8K gains. On the other hand, the excellent US Non-Farm Payrolls report certainly helped the loonie – Canada depends on the US. Updates: Building Permits looked absolutely awful, plunging 13.2%. The estimate stood at a decline of only 2.6%. Ivey PMI, a key indicator, will be released later today. The markets are expecting a drop in the November release. The loonie continues to improve against the US dollar. USD/CAD was trading at 0.9933. Obama gets 4 more years. USD/CAD falls first on greenback selling, and reaches 0.9877 before making a huge rebound and reaching 0.9958. PMI dropped to 58.3 points, matching the forecast. There are several releases later on Thursday, including Trade Balance. The markets are forecasting a slightly larger trade deficit. USD/CAD is steady, as the pair was trading at 0.9967. USD/CAD daily chart with support and resistance lines on it. Click to enlarge: Building Permits: Monday, 13:30. The total value of Canadians building permits surged unexpectedly in August by 7.9% amid a four year record of non- residential construction permits. Economists expected a 0.7% decline. The reading followed a 2.8% drop in the July. Meanwhile residential construction dropped 2.3%. Ivey PMI: Tuesday, 15:00. Purchasing activity slowed in September posting a 60.4 reading following62.5 in August. The reading was a bit higher than the 59.2 predicted by analysts. This moderation goes in line with other data such as the RBC’s manufacturing PMI, however the reading still indicates expansion. Housing Starts: Thursday, 13:15. Canadian housing starts slowed in September to 220,215 units, from 225,328 units in August, amid declines in the apartment and condo market. Economists said expected a sharper drop to 201,000 units. Analysts believe that the Canadian housing starts will continue to slow down following the elevated construction pace seen in the last few months. Another decline to 210,000 is expected now. Trade Balance: Thursday, 13:30.Canada’s merchandise trade deficit contracted more than predicted in August down to C$1.32 from C$2.53 billion in July. Economists expected deficit to reach C$1.8 billion. Imports dropped to a three year low down 3.1% to C$38.8 billion in August, but analysts worn this is a bad sign since most of the decline occurred in machinery and equipment pointing to a lack of confidence in investment. Deficit is expected to increase to C$1.4 billion. NHPI: Thursday, 13:30. New housing price index increased 0.2 % in August, following a 0.1% increase in July.Toronto and Oshawa were the main cause for this rise due to higher material and labor costs. Another 0.2% increase is expected this time. Mark Carney speaks: Thursday, 18:10. Mark Carney is scheduled to speak in Montreal where he is likely to raise the issue of Canada’s household debt problem, although he acknowledged that accumulation of household debt is slowing. * All times are GMT. USD/CAD Technical Analysis $/C$ began the week by trading upwards along uptrend support (mentioned last week) and climbed above parity. However, it stopped at 1.0020 and began descending. A second battle around parity ended with a slide, and the pair eventually closed at 0.9956. Technical lines, from top to bottom: Far in the distance, 1.0372 was a peak in June and also beforehand. 1.0250 was a peak back in July, more than once, and is minor now. 1.02 was the trough of 2009 and remains important since then, working in both directions. Another round number, 1.01, was a trough back in July, and switched to resistance afterwards. 1.0066 was key support before parity. It’s strength during July 2012 was clearly seen and it gave a fight before surrendering. Now, it is somewhat weaker. 1.0020 capped the pair in October 2012 and is the next line of defense around after parity. The very round number of USD/CAD parity is a clear line of course, and the battle was very clear to see at the beginning of August 2012. Just below parity, the 0.9975 line is the next line. 0.9880 showed that it is a clear separator in October 2012. It also had a role in the past. 0.9817 was a stubborn peak in September and is now significant resistance. It is a weaker line at the moment. Lower, 0.9725 worked as strong support back at the fall of 2011 and showed its strength once again in October 2012. 0.9667, which was another strong cushion in June 2011 is the next line. The round number of 0.96 provided some support back in 2011 and is minor now. Uptrend Channel Broken The pair slid under uptrend support and broke the line. I am neutral on USD/CAD. The price of oil continues to fall and other Canadian figures such as GDP and employment, both important indicators, disappointed. On the other hand, the US is showing more positive signs: first growth and now a very favorable jobs report. Canada depends on US demand more than on oil, and this will likely keep the pair stable. 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. 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 Forecast share Read Next USD/JPY Outlook November 5-9 Anat Dror 10 years The Canadian dollar had an interesting week, retreating to a 3 month low against the greenback but eventually closing almost at the same place. Building Permits, Ivey PMI and Trade Balance are the highlights of this week Here is an outlook on the major market-movers and an updated technical analysis for USD/CAD. The Canadian economy disappointed in August with a contraction of 0.1%, significantly worse than the 0.2% growth anticipated, amid a decrease in production. Nevertheless, Finance Minister Jim Flaherty said Canada's economic growth remains elevated despite this weak reading in August. 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