USD/CAD Forecast Nov. 20-24 2017

Dollar/CAD moved up in a mixed week, trying to find a new direction amid sliding oil prices. Retail sales stand out in the upcoming week. Here are the highlights and an updated technical analysis for USD/CAD.

Canada’s manufacturing sales and foreign securities purchases both beat expectations but the first ADP jobs report showed a drop in jobs. BOC member Wilkins gave acknowledged that they did not expect the strong growth rate is not sustainable. American lawmakers are struggling to pass the tax cuts that they promised. On the other hand, inflation data beat expectations. Canadian inflation data came out as expected and did not impress.

Updates:

USD/CAD daily chart with support and resistance lines on it. Click to enlarge:

  • Wholesale Sales: Tuesday, 13:30. The growth of sales at the wholesale level came out slightly below expectations for the month of August, with +0.5%. This publication has a significant impact and also serves as a warm up to the retail sales report.
  • Retail sales: Thursday, 13:30. Retail sales are often published alongside the inflation data and do not get the necessary attention. This time is different. Sales slipped by 0.3% in August, badly disappointing. Core retail sales also fell short of the mark with a decrease of 0.7%.
  • Corporate Profits: Friday, 13:30. After a big fall of 7.4% in the first quarter of 2017, corporate profits ticked up by only 0.1% in Q2, a figure which is usually quite volatile. An increase is on the cards now.
  • * All times are GMT

    USD/CAD Technical Analysis

    Dollar/CAD began the week by testing support at 1.2665, mentioned last week. From there is advanced to challenge 1.2770, trading in a perfect range.

    Technical lines from top to bottom:

    1.3160 provided support back in June. 1.3080 was a line of resistance to the pair in its recovery attempts in July.

    1.2920 capped the pair in late October. It is followed by 1.2860 which worked as support back in July.

    1.2790 was the high in mid-November and serves as resistance. 1.2665 was a swing high of a move higher in early September. It is followed by 1.26, a round number that worked as resistance in October.

    1.2540 capped the pair in early October when it traded in a narrow range. 1.2410 held the pair cushioned for some time but was eventually broken. 1.22 is a round number and also worked as support a few years ago.

    1.22 is a round number and also worked as support a few years ago. 1.2065 is the (current) swing low of September 2017. It is followed by the obvious level of 1.20.

    I remain bullish on USD/CAD

    The loonie was hardly able to take advantage of rising oil prices and suffers their fall. This is a clear bearish sign. There may be more room for the downside on CAD, upside for USD/CAD.

    Our latest podcast is titled Yield curve blues and sparks in oil

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    Further reading:

    • EUR/USD forecast – for everything related to the euro.
    • GBP/USD forecast – Pound/dollar predictions
    • USD/JPY forecast – analysis for dollar/yen
    • AUD/USD forecast – projections for the Aussie dollar.
    • Forex weekly forecast – Outlook for the major events of the week.

    Safe trading!


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