The Canadian dollar reversed directions last week, dropping 180 points. USD/CAD closed the week at the 1.33 line. There is just one event on the schedule this week. Here is an outlook on the major market- movers and an updated technical analysis for USD/CAD.
In the US, Philly Fed Manufacturing Index continued to climb higher and unemployment claims beat expectations for a fourth straight week. Canadian inflation numbers remained soft, as CPI disappointed with a second straight decline.
Updates:
USD/CAD daily graph with support and resistance lines on it. Click to enlarge:
- Wholesale Sales: Monday, 13:30. Â This event is a leading indicator of consumer confidence. The indicator rebounded in October with a strong gain of 1.1%, crushing the forecast of 0.3%. The markets are expecting a much smaller gain of 0.3% in the November report.
* All times are GMT
USD/CAD Technical Analysis
USD/CAD opened the week at 1.3127 and quickly dropped to a low of 1.3011, as support held at 1.3003 (discussed last week). It was all uphill from there, as the pair rose sharply and climbed to a high of 1.3388. USD/CAD was unable to consolidate at this level and closed at 1.3306.
Live chart of USD/CAD:
Technical lines, from top to bottom
We start with resistance at 1.3672.
1.3551 is next.
1.3433 was the high point in October.
1.3351 was tested in resistance as USD/CAD posted sharp gains.
1.3219 has switched to a support role.
1.3124 is next.
1.3003 is protecting the symbolic 1.30 level.
1.2908 has held in support since September 2016. It is the final support line for now.
I am bullish on USD/CAD
The US economy continues to fire on all four cylinders and if inflation picks up, the Fed will likely step in with additional rate hikes which is bullish for the US dollar.
