USDCAD Forecast: Canadian dollar lower, manufacturing sales next

Kenny Fisher MarketPulse

The Canadian dollar has edged lower in the Wednesday session. Currently, USD/CAD is trading at 1.2974, up 0.31% on the day. On the release front, there are key indicators on both sides of the border. Canada releases Manufacturing Sales is expected to decline by 0.6%. In the U.S, the focus is on construction data. Building Permits are expected to rise to 1.28 million, while Housing Starts are forecast to slip to 1.21 million. As well, the Federal Reserve releases the minutes of its September policy meeting. On Thursday, the U.S publishes Philly Fed Manufacturing Index and unemployment claims.

The Canadian dollar gained ground early this week. The currency received a boost from an optimistic Bank of Canada business survey on Monday. The poll found that businesses expect higher sales for both domestic and foreign customers. Companies are reporting increased investment and hiring, and the mood is optimistic in the business sector. Investors are keeping an eye on the BoC, which set the benchmark rate next week. The markets are widely expecting the BoC to raise rates by a quarter-point, which would match the Fed rate hike in September.

U.S indicators were a mixed bag on Monday, as retail sales were soft but manufacturing data was solid. Retail Sales posted a meager gain of 0.1%, shy of the estimate of 0.4%. Core Retail Sales surprised with a decline of 0.1%, compared to an estimate of 0.4%. This marked the first decline since June 2017. There was better news from the manufacturing front, as Empire State Manufacturing Index strengthened to 21.1, above the estimate of 20.4 points.

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USD/CAD Fundamentals

8:30 Canadian Manufacturing Sales. Estimate
8:30 US Building Permits. Estimate 1.28M
8:30 US Housing Starts. Estimate 1.21M
10:30 US Crude Oil Inventories
12:10 US FOMC Member Lael Brainard Speaks
8:30 Canadian ADP Nonfarm Employment Change
8:30 US Philly Fed Manufacturing Index. Estimate 19.7
8:30 US Unemployment Claims. Estimate 211K

Open: 1.2934 High: 1.2970 Low: 1.2933 Close: 1.2968

USD/CAD Technical

S3	S2	S1	R1	R2	R3
1.2649	12733	1.2831	1.2970	1.3067	1.3198

USD/CAD ticked higher in the Asian session. The pair has posted losses in the European session and is steady early in North American trade

1.2831 is providing support
1.2970 has switched to a resistance line after losses by USD/CAD
Current range: 1.2831 to 1.2970

Further levels in both directions:

Below: 1.2831, 1.2733 and 1.2649
Above: 1.2970, 1.3067, 1.3198 and 1.3292

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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