USDCAD Forecast: Canadian dollar at 2-week high, US consumer inflation next

The Canadian dollar is almost unchanged in the Thursday session. Currently, USD/CAD is trading at 1.3006, up 0.05% on the day. On the release front, Canada releases NHPI, which is expected to post a gain of 0.1% for a second straight month. In the U.S, the focus will be on key consumer inflation reports. CPI is expected to edge up to 0.3%, while Core CPI is forecast to remain pegged at 0.2%. As well, unemployment claims are expected to rise to 213 thousand. On Friday, the U.S release retail sales and UoM Consumer Sentiment.

The Canadian dollar has rallied this week, gaining 1.2%, as it hovers at the symbolic 1.30 level. Trade talks between the U.S and Canada are continuing, with the parties hoping to wrap up an agreement shortly. The Bank of Canada is also keeping a close eye on the NAFTA negotiations Last week’s rate announcement that policymakers would be “monitoring closely the course of the NAFTA negotiations and other trade policy developments, and their impact on the inflation outlook”. With the Canadian economy performing well and the Fed likely raising rates later this month, there is pressure on the BoC to again raise rates in 2018. However, concerns over NAFTA and global trade tensions have won the day for now, as the BoC took a pass on a rate hike.

CBRT takes the focus off BoE and ECB meetings

 

USD/CAD Fundamentals

  • 8:30 Canadian NHPI. Estimate 0.1%

  • 8:30 US CPI. Estimate 0.3%

  • 8:30 US Core CPI. Estimate 0.2%

  • 8:30 US Unemployment Claims. Estimate 210K

  • 10:00 US FOMC Member Rafael Bostic Speaks

  • 10:30 US Natural Gas Storage. Estimate 65B

  • 13:01 30-year Bond Auction

  • 13:15 US FOMC Member Raphael Bostic Speaks

  • 14:00 US Federal Budget Balance. Estimate -169.8B

  • 8:30 US Core Retail Sales. Estimate 0.5%

  • 8:30 US Retail Sales. Estimate 0.4%

  • 8:30 US Import Prices. Estimate -0.2%

  • 9:15 US Capacity Utilization Rate. Estimate 78.3%

  • 9:15 US Industrial Production. Estimate 0.3%

  • 10:00 US Preliminary UoM Consumer Sentiment. Estimate 96.7

  • 10:00 US Business Inventories. Estimate 0.5%

  • 10:00 Preliminary UoM Inflation Expectations

USDCAD

Open: 1.3000 High: 1.3018 Low: 1.2994 Close: 1.3006

 

USD/CAD Technical

S3

S2

S1

R1

R2

R3

1.2666

1.2831

1.2970

1.3067

1.3160

1.3292


USD/CAD showed little movement in the Asian session. In European trade, the pair posted small gains but has retracted

  • 1.2970 is under pressure in support

  • 1.3067 is the next resistance line

  • Current range: 1.2970 to 1.3067

Further levels in both directions:

  • Below: 1.2970, 1.2831 and 1.2666

  • Above: 1.3067, 1.3160, 1.3292 and 1.3386

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