USD/CAD Forecast May 15-19

It was another uneventful week for USD/CAD, which posted slight losses . The pair closed the week almost unchanged at 1.3649. There are just four events this week. Here is an outlook on the major market- movers and an updated technical analysis for USD/CAD.

In the US, President Trump’s firing of FBI Director James Comey set off a political firestorm in Washington. The controversial move has markets worried that the Administration may have to delay plans for fiscal spending and tax reform. The US dollar on the news but recovered quickly. On the fundamental side, US CPI and retail sales disappointed and missed the forecasts. In Canada, Building Permits posted a sharp decline and missed expectations.

Updates:

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

1. Manufacturing Sales: Wednesday, 12:30.  This is the first key indicator of the week. Manufacturing Sales declined 0.2% in February, its weakest reading since October 2016. The markets are expecting a rebound in March, with an estimate of 0.4%.
2. Foreign Securities Purchases: Thursday, 12:30. The indicator soared in February to C$38.84 billion, crushing the reading of C$5.21 billion. Will we see another strong reading in March?
3. CPI: Friday, 12:30. CPI is the primary gauge of consumer inflation. In March, the index remained at 02%, missing the estimate of 0.4%. The markets are predicting a stronger gain in April, with an estimate of 0.5%.
4. Core Retail Sales: Friday, 12:30. In February, the indicator posted its second decline in three months, with a small decline of 0.1%. The estimate for March stands at 0.2%.
5. Retail Sales: Friday, 12:30. Retail Sales posted a decline of 0.6% in February, lower than the estimate of 0.0%. The markets are expecting better news in March, with a forecast of a 0.3% gain.

USD/CAD Technical Analysis

USD/CAD opened the week at 1.3669 and quickly dropped to a low of 1.3643, testing support at 1.3648 (discussed last week). Late in the week, the pair climbed to a high of 1.3770. USD/CAD closed the week at 1.3702.