The Canadian dollar resumed its gains against the greenback, but USD/CAD remained above strong support. Important events are heading our way with the rate decision, employment data and housing data. Here is an outlook on the major market-movers and an updated technical analysis for USD/CAD. Last week, Canada reported growth of 0.2% in June, beating expectations for a 0.1% growth rate in June. On a yearly base GDP expanded 1.8% in the April-June period, better than the 1.7% growth rate recorded in the U.S. Will the Canadian economy continue to expand in the third quarter? Updates: The markets are awaiting the BOC’s interest rate announcement and accompanying Rate Statement on Wednesday. The loonie is steady, as USD/CAD was trading at 0.9855. The Canadian dollar barely registered the provincial election in Quebec, in which the separatist party won, and will likely from a minority government. USD/CAD was trading at 0.9887. As expected, the BOC maintained its key interest rate at a level of 1.0%. In its accompanying Rate Statement, the bank said that the low interest rate policy will continue, and noted that the export sector continues to suffer due to weak global demand. Building Permits and Employment Change will be released on Friday. The loonie continues to move downwards, with USD/CAD trading at 0.9881. USD/CAD daily chart with support and resistance lines on it. Click to enlarge: Rate decision: Wednesday, 13:00. The Bank of Canada maintained its overnight rate at 1.0% in July declaring that rate cuts, similar to those performed by other central banks, are not likely. Moreover the banks intention is to raise rates rather than lower them. However for now, things look stable. Rates are expected to remain unchanged. Building Permits: Friday, 12:30. The value of building permits issued in Canada dropped less than predicted by 2.5% in June following the 7.1% boost of in May. Economists expected the housing market to cool by 3.5% drop after the impressive number of building permits issued in May. The slowdown in the pace of price increases also indicates the housing market is slowing down. A smaller drop of 1.5% is expected this time. Employment data: Friday, 12:30. The Canadian job creation halted abruptly in July with a massive reduction of 30,400 jobs, pushing up unemployment rate to 7.3%. Economists did not forecast this sharp drop expecting a gain of 9,600 jobs. Nevertheless Canadian job creation is still in a good place with 21,300 net, new full-time jobs for July offset by the loss of 51,600 part-time workers. Economists expect an addition of 9,900 new jobs and predict unemployment rate will remain 7.3%. Labor Productivity: Friday, 12:30. The Canadian Labor productivity gained 0.1% in the first quarter compared to 0.7% in the fourth quarter while businesses maintained the same output growth rate of 0.5%. The service sector was the main contributor for this rise. Productivity in the goods-producing businesses decreased 0.1% compared to 0.1% gain in the previous quarter. A further improvement of 0.2% is expected now. Ivey PMI: Friday, 13:00. Purchasing activity edged up by 13.8 points to 62.8 in July, the highest level in four months, following 49.0 in June. Economists expected a moderate increase to 52.0. However Canadian economic growth is still fragile due to downside risks from the European debt crisis. Another climb to 64.5 is anticipated this time. Mark Carney speaks: Friday, 15:40. Mark Carney BOC Governor will speak in Calgary. His speech can create volatility in the market, especially if his words are hawkish. * All times are GMT. USD/CAD Technical Analysis USD/C$ struggled around the 0.99 line early in the week before diving to the strong 0.9840 line (discussed last week). The pair then rose back up but the close at 0.9852 endangers support at 0.9840. Technical lines, from top to bottom: The round number of 1.03 was resistance at the beginning of the year and now returns to this role. It worked perfectly well during June – over and over again, until finally being run through. 1.0245 served as a separator for the move up when the pair rallied in May 2010 and regains some strength now, thanks to capping the pair in July 2012, twice during this month The round figure of 1.02 was a cushion when the pair dropped in November, and also the 2009 trough. It remains a distinct separator after working as such in July. 1.0150 was a swing low in September and worked as resistance several times afterwards. It was challenged in June 2012. and served as a separator in July 2012. 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. 1.0030 is another line of defense before parity after capping the pair earlier in the year. The move below this line is not confirmed yet. 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. Under parity, 0.9950 is now the top border of the range, similar to a role it played in March 2012. It also worked well as resistance in August 2012, in more than one occasion. 0.99, the round number capped the pair in May 2012, is now a pivotal line in the middle of the range. 0.9840 provided support for the pair during September and proved its strength in several occasions during August 2012. This is critical support. Lower, 0.9725 worked as strong support back at the fall of 2011. 0.9667, which was another strong cushion in June 2011 is the next line. The last line for now is 0.9550, which worked as resistance when the pair traded in low ground. Downtrend line now crossed to the downside The line worked from mid May and worked perfectly well until the decisive break downwards. And now, the tables have turned once again and the pair is over the line again. This downtrend line is still of importance as a separator, despite the breaks. I am bearish on USD/CAD. Stronger growth figures, hopes for QE3 (even though not that justified) and higher oil prices will likely support the loonie. A break under 0.9840 could open the door for bigger drops. 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 GBP/USD: Trading the British Manufacturing PMI Kenny Fisher 10 years The Canadian dollar resumed its gains against the greenback, but USD/CAD remained above strong support. Important events are heading our way with the rate decision, employment data and housing data. Here is an outlook on the major market-movers and an updated technical analysis for USD/CAD. Last week, Canada reported growth of 0.2% in June, beating expectations for a 0.1% growth rate in June. On a yearly base GDP expanded 1.8% in the April-June period, better than the 1.7% growth rate recorded in the U.S. Will the Canadian economy continue to expand in the third quarter? 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