USD/CAD Forecast: Canadian dollar edges higher, U.S. manufacturing report beats estimate


USD/CAD is slightly lower at the start of the week. Currently, the pair is trading at 1.3302, down 0.18% on the day. In the U.S., the Empire State Manufacturing Index improved to 10.1, beating the estimate of 8.1 points. Later in the day, Canada releases the BoC Business Outlook Survey. This indicator provides a snapshot of business sentiment, and should be treated as a market-mover. On Tuesday, Canada releases manufacturing sales, which is expected to decline by 0.1% in February, after a strong gain of 1.0% in January.

The Bank of Canada remains in dovish mode and may freeze rate hikes until 2020. The lack of activity from the BoC could weigh on the Canadian dollar, as the prospect of higher rates would make the Canadian currency more attractive to investors. Last week, the IMF downgraded economic forecasts worldwide, and Canada was no exception. The IMF lowered its forecast for the Canadian growth from 1.9% to 1.5%. The report noted that Canada would be a major beneficiary if the U.S and China can hammer out a deal and end their bruising trade war. The IMF also lowered its forecast for global growth, from 3.5% to 3.3%.

There was positive news on the U.S. inflation front last week, as key indicators headed higher in March. CPI, the key gauge of consumer spending, climbed to 0.4%, its highest gain since January 2018. The producer price index also looked strong, climbing 0.6%, a 5-month high. Inflation remains well below the Federal Reserve target of 2.0%, but stronger inflation numbers will bolster the case of Fed officials who favor raising rates in 2019 if the economic outlook improves. The Fed minutes from the March meeting left the door open to further rate hikes this year, but current market pricing suggests no hikes until 2020, and some analysts are expecting a cut in rates later this year.

USD/JPY hits six-week high as positive vibes continue

 

USD/CAD Fundamentals

Monday (April 15)

  • 8:30 US FOMC Member Evans Speaks

  • 8:30 US Empire State Manufacturing Index. Estimate 8.1

  • 10:30 BOC Business Outlook Survey

  • 13:00 US FOMC Member Evans Speaks

  • 16:00 US TIC Long-Term Purchases

  • 20:00 US FOMC Member Rosengren Speaks

Tuesday (April 16)

  • 8:30 Canadian Manufacturing Sales. Estimate -0.1%

  • 9:15 US Capacity Utilization Rate. Estimate 79.2%

  • 9:15 US Industrial Production. Estimate 0.2%

  • 10:00 US NAHB Housing Market Index. Estimate 63

USDCAD

Open: 1.3326 High: 1.3341 Low: 1.3300 Close: 1.3302

 

USD/CAD Technical

S3

S2

S1

R1

R2

R3

1.3125

1.3200

1.3290

1.3383

1.3445

1.3552


USD/CAD was flat for most of the Asian session. In European trade, the pair posted small gains but then retracted

  • 1.3290 is a weak support level

  • 1.3383 is the next resistance line

  • Current range: 1.3290 to 1.3383

Further levels in both directions:

  • Below: 1.3290, 1.3200 and 1.3125

  • Above: 1.3383, 1.3445, 1.3552 and 1.3662

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities.

Opinions are the authors — not necessarily OANDA’s, its officers or directors. OANDA’s Terms of Use and Privacy Policy apply. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Feed news

Latest Forex Analysis

Editors’ Picks

EUR/USD steady around 1.1160 post-FOMC Minutes

The US Federal Reserve document failed to impress, with the market ignoring the release, overshadowed by the Brexit drama and the more updated statement from Chief Powell last Monday.

EUR/USD News

GBP/USD: reports suggest UK PM May could resign tonight

GBP/USD is bouncing from its daily low of 1.1623, following news indicating that the UK Prime Minister would resign before the day is over, following an early cabinet coup and multiple backs and forth around it.

GBP/USD News

USD/JPY hits fresh lows after FOMC minutes

The USD/JPY pair rose to 110.31 after the release of the FOMC minutes but then turned to the downside and dropped to 110.23, hitting a fresh daily low. 

USD/JPY News

A 30% pullback is a great chance to collect Bitcoins, BTC/USD targets $5,500

ETH/BTC leads the way in the event of falls. Neutral strategies are also possible for the more conservative. This game is the favorite of the applicants for "whale."

Read more

Gold refreshes session tops, lacks follow-through ahead of FOMC minutes

Gold finally broke out of its daily consolidative range and was now seen building on the overnight goodish bounce from two-week lows.

Gold News

Majors

Cryptocurrencies

Signatures