USD/CAD gained 1 percent last week, its best weekly gain in a month. There are four releases in the upcoming week, including employment change. Here is an outlook at the highlights and an updated technical analysis for USD/CAD.
In Canada, building permits rebounded with a sharp gain of 20.2%, crushing the estimate of 10.3 percent. This follows back-to-back declines. The Raw Materials Price Index posted a gain of 16.4% in May, the first gain since January. Canada’s GDP contracted by 11.6% in April, after a decline of 7.2% beforehand.
- BoC Business Outlook Survey: Monday, 14:30. This well-respected survey looks at a wide range of business conditions, including spending and hiring expectations. It should be treated as a market-mover.
- Ivey PMI: Tuesday, 14:00. The PMI has improved dramatically in May, climbing from 22.8 to 39.12 points. The uptick is expected to continue in June, with an estimate of 50.2 points. The 50-level separates contraction from expansion.
- Housing Starts: Thursday, 12:15. Housing starts improved to 193 thousand in May, up sharply from 171 thousand. This easily beat the estimate of 160 thousand. The June estimate stands at 185 thousand.
- Employment Report: Friday, 13:30. Canada’s economy rebounded from a loss of over 1.99 million jobs in April, with a gain of 289.6 thousand in May. Analysts are expecting better numbers in June, with a forecast of 550.0 thousand. The unemployment rate climbed from 13.0% to 13.7% in May, but this beat the forecast of 15.0%. The estimate for June is 12.5 percent.
USD/CAD Technical Analysis
Technical lines from top to bottom:
We start with resistance at the round number of 1.39. This line has been a resistance line since late May. 1.3757 is next.
1.3661 (mentioned last week) has switched to a resistance role after losses by USD/CAD last week.
1.3550 is an immediate resistance line.
1.3420 is providing support.
1.3330 is next.
1.3265 is the final support level for now.
I am neutral on USD/CAD
The Canadian dollar lost close to 5 percent in March but has since recovered much of these losses. The U.S dollar is a traditional safe-haven in times of crisis, but investors continue to show a willingness to buy minor currencies like the Canadian dollar.
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