Dollar/CAD had a busy week, falling initially but regaining some ground later on. The upcoming week features inflation and retail sales numbers. What is the next move for the pair? Here are the highlights and an updated technical analysis for USD/CAD.
The Canadian dollar was at the mercy of oil prices, which initially dropped but later recovered. The US dollar had more twists and turns to its trading, with an initial surge followed by a crash and a later recovery. The Canadian ADP reports showed a gain of over 10,000 jobs, better than the official report.
Updates:
USD/CAD daily graph with support and resistance lines on it.
-
Wholesale Sales: Tuesday, 13:30. The volume of sales at the wholesale level serves as a warmup for the consumer data later on. After a rise of 0.7% last month, we may see a slide now.
-
Retail sales: Thursday, 13:30. The volume of sales rose by 0.2% back in November and now we get the belated data for December. Core sales are also of interest, especially as they leaped by 1.6% in November. They may see a drop now.
-
Corporate profits: Thursday, 13:30. Corporate profits jumped by 8.5% in Q3, reflecting strength. We may see a more moderate rise in this volatile measure.
-
Canadian inflation report: Friday, 13:30. The Bank of Canada raised the interest rate in January but seems to hesitate about the next move. A rise in inflation may change their minds. Back in December, headline CPI dropped by 0.4% m/m but measures of core inflation ticked higher, with the Common CPI standing at 1.6%, Median CPI at 1.9%, and the Trimmed CPI at 1.8%.
USD/CAD Technical Analysis
Dollar/CAD dropped towards the 1.2435 level, discussed last week, before bouncing back up.
Technical lines from top to bottom:
1.2790 was the high in mid-November and serves as resistance. 1.2665 was a was a double-bottom in November and works as strong support.
It is followed by 1.26, a round number that worked as resistance in October. 1.2540 capped the pair in early October when it traded in a narrow range.
1.25 remains a battleground. 1.2450 served as support in Februry. 1.2335 gave support to the pair in late September and it worked well in January 2018.
Even lower, 1.2250 cushioned the pair on its fall in February 2018. It is closely followed by 1.22
Strong support only awaits at 1.2070. The round number of 1.20 is next. And below there, only 1.18.
I remain bullish on USD/CAD
The Canadian dollar took advantage of the weak US dollar, but this may not necessarily last for long. In addition, downward pressure on oil prices could weigh.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
AUD/USD pressures as Fed officials hold firm on rate policy
The Australian Dollar is on the defensive against the US Dollar, as Friday’s Asian session commences. On Thursday, the antipodean clocked losses of 0.21% against its counterpart, driven by Fed officials emphasizing they’re in no rush to ease policy. The AUD/USD trades around 0.6419.
EUR/USD extends its downside below 1.0650 on hawkish Fed remarks
The EUR/USD extends its downside around 1.0640 after retreating from weekly peaks of 1.0690 on Friday during the early Asian session. The hawkish comments from Federal Reserve officials provide some support to the US Dollar.
Gold price edges higher on risk-off mood hawkish Fed signals
Gold prices advanced late in the North American session on Thursday, underpinned by heightened geopolitical risks involving Iran and Israel. Federal Reserve officials delivered hawkish messages, triggering a jump in US Treasury yields, which boosted the Greenback.
Runes likely to have massive support after BRC-20 and Ordinals frenzy
With all eyes peeled on the halving, Bitcoin is the center of attention in the market. The pioneer cryptocurrency has had three narratives this year already, starting with the spot BTC exchange-traded funds, the recent all-time high of $73,777, and now the halving.
Billowing clouds of apprehension
Thursday marked the fifth consecutive session of decline for US stocks as optimism regarding multiple interest rate cuts by the Federal Reserve waned. The downturn in sentiment can be attributed to robust economic data releases, prompting traders to adjust their expectations for multiple rate cuts this year.