Dollar/CAD drifted back up in a week that was mostly about a risk-off atmosphere. What’s next? The BOC’s Business Outlook and a double-feature Friday stand out. Here are the highlights and an updated technical analysis for USD/CAD.
Stock markets tumbled down and the ensuing risk-off atmosphere weighed on the loonie, a risk currency. The Canadian Dollar also struggled with falling oil prices and some profit-taking in the aftermath of the new NAFTA deal. The greenback pared back some of its gains later in the week as inflation and consumer confidence fell short of expectations.
USD/CAD daily chart with support and resistance lines on it. Click to enlarge:
*All times are GMT
USD/CAD Technical Analysis
Dollar/CAD had a slow start to the week, clinging to the 1.30 level (mentioned last week). It then moved higher and did not overcome 1.3070.
Technical lines from top to bottom:
1.3295 held the pair down in mid-July. 1.3220 capped it earlier in the month.
1.3100 is a round number that also capped the pair several times in August. 1.3070 held the pair down in mid-October.
Below 1.3000 we find the mid-August trough of 1.2960. 1.2880 was a double-bottom in September and in August.
1.2820 was a stepping stone on the way up in late May. 1.2780 was the low point in October 2018.
1.2730 provided support earlier in May. Lower, 1.2630 held the pair down back in April.
Further down, 1.25 is a critical round number and also 0.80 on CAD/USD.
I remain bearish on USD/CAD
The Canadian Dollar does not reflect the good news from the recent trade deal. In addition, the upcoming rate hike by the BOC should keep the C$ bid.
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