USD/CAD Forecast Oct. 24-28
|The Canadian dollar dropped sharply, losing close to 200 points. USD/CAD closed the week at 1.3327. Wholesale Sales is the only event on this week’s schedule. Here is an outlook on the major market-movers and an updated technical analysis for USD/CAD.
The Canadian dollar sagged late in the week, hurt by weaker than expected retail sales numbers as well as a dovish statement from the Bank of Canada. In the US, unemployment claims surprised by missing expectations.
USD/CAD daily graph with support and resistance lines on it.
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Wholesale Sales: Monday, 12:30. Wholesales Sales is closely watched as it is a leading indicator of consumer spending. The indicator has been losing ground in recent months and fell to just 0.3% in July. Little changed is expected in the August release, with an estimate of 0.2%.
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BoC Governor Stephen Poloz Speaks: Monday, 19:30. Poloz will testify before the House of Commons Standing Committee on Finance in Ottawa. The markets will be looking for clues regarding future monetary moves on the part of the BoE.
USD/CAD opened the week at 1.3142. The pair dropped to a low of 1.3003, as support held firm at 1.2990 (discussed last week). USD/CAD rebounded late in the week, climbing to a high of 1.3355. The pair closed the week at 1.3327.
Technical lines, from top to bottom
We start with resistance at 1.3672.
1.3551 has provided resistance since March.
1.3457 was a cap in September 2015.
1.3353 was tested in resistance. It is currently a weak line.
1.3219 was a cap in April. It is an immediate support level.
1.3081 is the next support line.
1.2990 has held firm since early September.
The round number of 1.2900 is the final support level for now.
I remain bullish on USD/CAD
The US economy remains strong and with a December Fed hike priced at around 70%, monetary divergence continues to favor the US dollar. Oil prices have risen in recent weeks, but the Canadian dollar has not followed suit, as USD/CAD is trading at its highest levels since March.
Interested in USDCAD technicals? Check out the key levels
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