The Canadian dollar showed some movement during the week, but ended the week unchanged. USD/CAD closed the week at 1.3347. This week’s key event is GDP. Here is an outlook on the major market- movers and an updated technical analysis for USD/CAD.
In the US, Fed Chair Yellen missed the chance to boost the US dollar, as she sent out a dovish message after the rate hike. Unemployment Claims were unexpectedly weak, soaring to 261 thousand. Canada’s Core Retail Sales jumped 1.7%, above expectations. However, CPI softened to 0.2%, matching the forecast.
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USD/CAD daily graph with support and resistance lines on it.
BoC Governor Stephen Poloz Speech: Tuesday, 14:10. Poloz will deliver remarks at an event in Oshawa. The markets will be looking for clues regarding the central bank’s future monetary policy.
RMPI: Thursday, 12:30. This index gauges inflation in the manufacturing sector. In January, the indicator softened to 1.7%, above expectations. In December, the index recorded a sharp gain of 6.5%.
GDP: Friday, 12:30. GDP is released on a monthly basis, In December, the economy expanded 0.3%, matching the forecast. The estimate for the January report remains at 0.3%.
USD/CAD Technical Analysis
USD/CAD opened the week at 1.3334 and dropped to a low of 1.3260, as support held firm at 1.3212. The pair then reversed directions and climbed to a high of 1.3409. USD/CAD closed the week at 1.3347.
Technical lines, from top to bottom
1.3782 has held in resistance since the start of February.
1.3648 was an important support level in February.
1.3551 is the next line of resistance.
1.3457 was a high point in September 2015.
1.3351 was tested in resistance and remains a weak line.
1.3212 is providing support. It was a cap in the second quarter of 2016.
1.3124 is the next support level.
1.3003 is protecting the symbolic 1.30 level.
1.2908 is the final support level for now.
I am bullish on USD/CAD
In the US, the Fed has sent clear signals that it is projecting two more rate hikes this year, disappointing the markets. President Trump failed to pass a key health care bill last week and remains embroiled in scandals, which could lessen risk appetite and hurt the Canadian dollar.