USD/CAD Forecast– Canadian dollar edges lower, US retail sales expected to slip

Kenny Fisher MarketPulse

The Canadian dollar has ticked lower in the Friday session. Currently, USD/CAD is trading at 1.3389, up 0.24% on the day. On the release front, there are no Canadian events. In the U.S, the spotlight is on consumer spending. Retail sales and core retail sales are expected to drop sharply, with forecasts of 0.2% and 0.1%, respectively.

It has been a rough few weeks for the Canadian dollar. The currency has been under pressure since mid-November, losing 1.1 percent during the time. Weaker oil prices and a cooling U.S. economy have hampered Canada’s economy, and the BoC responded last week by remaining on the sidelines and maintaining interest rates.

In the U.S, weak inflation levels are another sign that the economy is slowing down. CPI dropped to 0.0% in November, down from 0.3% a month earlier. This marked the lowest level since May. Core CPI remained pegged at 0.2 percent. The weak readings can be attributed to falling oil prices, which has led to a sharp decline in gasoline prices. On an annualized basis, inflation gained 2.2 percent in November, down from 2.5 percent in October. With the U.S. economy showing signs of slowing down, and the global trade war taking a bite out of the global economy, inflation could continue to head lower as we head into 2019. This has led to a reassessment at the Federal Reserve of monetary policy. Earlier in the year, the Fed was sending messages that it would raise rates three or four times next year. This has been drastically scaled back, with some analysts predicting only one rate hike in 2019.

USD/CAD Fundamentals

Friday (December 14)

8:30 US Core Retail Sales. Estimate 0.2%
8:30 US Retail Sales. Estimate 0.1%
9:15 US Capacity Utilization Rate. Actual 78.6%
9:15 US Industrial Production. Estimate 0.3%
9:45 US Flash Manufacturing PMI. Estimate 55.1
9:45 US Flash Services PMI. Estimate 54.7
10:00 US Business Inventories. Estimate 0.6%

S3	S2	S1	R1	R2	R3
1.3198	1.3292	1.3383	1.3461	1.3552	1.3696

USD/CAD posted small gains in Asian trade and this trend has continued in the European session

1.3383 was tested earlier in support and is a weak line

1.3461 is the next resistance line

Current range: 1.3383 to 1.3461

Further levels in both directions:

Below: 1.3383, 1.3292, 1.3198 and 1.3099
Above: 1.3461, 1.3552 and 1.3696

Author

Kenny Fisher

MarketPulse

A highly experienced financial market analyst with a focus on fundamental analysis, Kenneth Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities.

USD/JPY extends sell-off below 157.00 on hawkish BoJ repricing

USD/JPY extends sell-off below 157.00 in European trading on Thursday. Traders react negatively to the weak US ADP report, smashing the US Dollar across the board and exerting renewed selling pressure on the pair. Meanwhile, hawkish BoJ expectations and intervention risks continue to lend support to the Japanese Yen, rendering it negative for the major.

AUD/USD ranges above 0.7150 despite upbeat Chinese PMI

AUD/USD struggles to capitalize on the previous day's bounce from a nearly two-week low and ranges above 0.7150 in Asia on Thursday, as dismal Australian trade data counter upbeat China's RatingDog Services PMI. However, the pair's upside remains in check as the US Dollar stalls the weak ADP report-led slide amid escalating US-Iran tensions and firming September Fed rate-hike bets.

Gold sticks to gains below $4,450 amid weaker USD

Gold maintains its bid tone heading into the European session, though it remains below $4,450 amid mixed fundamental cues. Sliding US bond yields and Wednesday's soft US ADP report weigh on the US Dollar, assisting the commodity build on the previous day's goodish recovery from a nearly four-week low. That said, firming US Federal Reserve rate-hike expectations and inflation risks stemming from higher energy prices could act as a tailwind for US bond yields.

XRP defends key support, XLM awaits breakout as derivatives strengthen

Ripple (XRP) and Stellar (XLM) show divergent technical outlooks as traders assess whether the recent weakness could give way to a recovery. XRP is finding support and defining a key support zone, while XLM slips below a cluster of Exponential Moving Averages (EMAs).

Ripple defends key support; Stellar awaits breakout as derivatives strengthen

Ripple and Stellar show divergent technical outlooks as traders assess whether the recent weakness could give way to a recovery. XRP is finding support and defining a key support zone, while XLM slips below a cluster of Exponential Moving Averages.

Diesel’s record $100 warning: The oil shock hiding in plain sight

The Oil market may look calmer than it did a few months ago, but diesel is sending a very different message. The US diesel crack spread, the premium of ultra-low sulphur diesel futures over WTI, recently surged above $100 per barrel for the first time, reaching an intraday record of just over $102.00.