USD/CAD Forecast: Canadian dollar steady in slow data calendar

Kenny Fisher MarketPulse

The Canadian dollar has started the week quietly. Early in the North American session, USD/CAD is trading at 1.3321, down 0.12% on the day. On the release front, it’s a light day for fundamentals, so traders can expected an uneventful day from the pair. Canadian foreign securities purchases sparkled, with a reading of C$28.40 billion, well above the forecast of C$15.03 billion. This was the strongest gain in almost two years. The U.S. will release a minor housing report. On Tuesday, Canada releases its annual budget.

Is the Canadian economy heading into a recession? Despite some strong employment numbers, there are worrying signs. The economy recorded a weak 0.4% gain in Q4 on an annualized basis and has been listless early in 2019. David Wolf, a former senior official at BoC, has projected that the Canadian dollar could sink to its record low of 1.60 ($.62 cents U.S.). Weak oil prices and the global trade war have hurt the Canadian economy and dampened the critical export sector.

With the U.S-China trade war showing signs of easing, there were expectations that President Trump and Chinese President Xi might hold a summit in late March. However, it was reported last week that the two leaders will not meet before April. President Trump has said that there will be news in the next 3-4 weeks, which has raised hopes that China and the U.S. will hammer out an agreement. If there are positive developments in the trade war, risk appetite will likely climb, which would be good news for the Canadian dollar.

Yen slides on weak trade data

Sterling, yields and stocks set for a volatile week

USD/CAD Fundamentals

Monday (March 18)

8:30 Canadian Foreign Securities Purchases. Estimate 15.03B. Actual 28.40B
10:00 US NAHB House Market Index. Estimate 63

Tuesday (March 19)

8:30 Canadian Annual Budget Release

Open: 1.3337 High: 1.3348 Low: 1.3302 Close: 1.3333

USD/CAD Technical

S3	S2	S1	R1	R2	R3
1.3125	1.3200	1.3290	1.3383	1.3445	1.3552

USD/CAD posted slight losses in the Asian session but has recovered in European trade. The pair is unchanged early in North American trade

1.3290 is providing support
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

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.

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