USDCAD Forecast and Key Technical Levels

USDCAD Forecast and Key Technical Levels

Fundamentals on USD Side:

Delay on the reports due to shutdown:

The U.S. dollar traded higher against all of the major currencies Friday with the exception of the Canadian dollar because as it turns out, the U.S. government shutdown has been good for the dollar and stocks.

The delay of U.S. government releases gives the market relief. Major reports such as retail sales and the trade balance have been delayed due to the shutdown and while government shutdowns don’t tend to inflict lasting damage on the economy, it’s never gone on for this long.

Dovish comments from the Fed Members continue to hit the wires.

US Markets will be closed on Monday due to Martin Luther King, Jr. Day in the US.

The most important USD data to be released next week:

Tuesday: Home Sales

Thursday: Manufacturing, Services and Markit Composite PMI

Friday: Core Durable Goods Orders and New Home Sales

Fundamentals on CAD Side:

CPI unexpectedly rebounded to 2.0% in December despite a notable drag from energy prices. Expectations were for the headline rate to hold steady at 1.7%, but a significant jump in airfares (methodology changes have made this component extremely volatile over the last six months) added a surprising 0.3 percentage points. By contrast, the BoC’s core inflation measures were marginally softer on balance (averaging 1.87% y/y) following revisions to the November figures. The BoC sees that as evidence the economy has been operating close to full capacity for more than a year now.

BoC is likely to be patient in raising interest rates. Markets think that The BoC will want to see how the economy is progressing through this latest oil price decline, and expect the current pause in their tightening cycle will extend through their next meeting in March

The most important CAD data to be released next week:

Tuesday: Manufacturing Sales and Wholesale Sales

Wednesday: Retail Sales and Core Retail Sales (Nov)

Technical Overview:

Last week we saw the pair in a consolidation process. The downside is limited by 1.31800 and the upside capped by 1.33000.

Loonie is trading below all main EMAs on the H4 chart still in the bearish territory of smaller chart timeframes. A clear break above 1.33000 may carry the price towards 1.33600 which is blocked by the EMA100 and EMA200.

A clear break below 1.32400 may push the price towards 1.31800 – SMA 100 Support- 

We need to see a firm closing below 1.31800 for the bearish continuation. 1.30000 will be the targets of the Bears after a potential breakout of 1.31800.

Harmonic Overview:

A potential Bullish Cypher Pattern would be completed at 1.32000. This level can be used as buying opportunity. Details will be published for the members.

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DISCLAIMER: This is a technical analysis study, not advice or recommendation to invest money

USDCAD Forecast: Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these securities. You should do your own thorough research before making any investment decisions. Chartreaderpro does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Forex involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility