USD/CAD Forecast May 8-12

USD/CAD[1] posted gains during the week but gave up these gains late in the week. The pair closed the week almost unchanged at 1.3649. There are just four events this week. Here is an outlook on the major market- movers and an updated technical analysis for USD/CAD.
In the US, the Fed left rates unchanged and sounded optimistic about the economy[2]. In Canada, employment data was mixed. The economy added far fewer jobs than expected, but the unemployment rate dropped to its lowest level since 2008.
USD/CAD daily graph with support and resistance lines on it. Click to enlarge:
  1. Housing Starts: Monday, 12:15. The indicator provides a snapshot of the level of activity in the housing sector. In March, the indicator jumped to 254 thousand, crushing the estimate of 212 thousand. The April estimate stands at 220 thousand.
  2. Building Permits: Tuesday, 12:30. Canada’s posted a trade deficit of C$-1.0 billion in February, following three straight surpluses. The markets are expecting a small surplus of C$0.3 billion in the March report.
  3. NHPI: Thursday, 12:30. In February, this inflation index climbed 0.4%, above the forecast of 0.2%. The estimate for March stands at 0.3%.
  4. BoC Review: Thursday, 14:30.This minor event is released twice a year. The report includes articles about the economy and the Bank of Canada.

USD/CAD Technical Analysis

USD/CAD opened the week at 1.3642 and climbed to a high of 1.3794. Late in the week, the pair reversed directions and dropped to a low of 1.3619. USD/CAD closed the week at 1.3649, just above support at 1.3648 (discussed last week[3]).

Technical lines, from top to bottom

We begin with resistance at 1.4019. This line has held since February 2016.

The round number of 1.39 is next.

1.3757 is an immediate resistance line.

USD/CAD starts the week just above support at 1.3648.

1.3551 is next.

1.3457 was a high point in September 2015.

1.3351 has held in support since mid-April.

1.3212 is the final support level for now.

I am bullish on USD/CAD

The Fed statement was more hawkish than expected, increasing the likelihood of a June rate hike. The US economy remains strong, despite a disappointing Q1, and weak oil prices are weighing on the Canadian dollar.

Our latest podcast is titled No more dovish Draghi and diagnosing the Donald[4]

Follow us on Sticher or iTunes[5][6]

Safe trading!

Further reading:

Get the 5 most predictable currency pairs[7]

from Forex Crunch http://feedproxy.google.com/~r/ForexCrunch/~3/R2l5UMq5xkI/

from Online Forex Trading Resource
View thesource article here

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