The Canadian dollar rally continued last week, as USD/CAD dropped 250 points. The pair closed at 1.2633, its lowest weekly close since April 2016. This week’s key events are CPI and Core Retail Sales. Here is an outlook on the major market-movers and an updated technical analysis for USD/CAD.
The Canadian dollar sparkled last week, buoyed by a rate hike from the Bank of Canada. The BoC raised rates from 0.50% to 0.75%. This was the first rate hike since July 2015. In the US, the latest political scandal involving Donald Trump Jr. hurt the dollar, and Yellen’s concern about low inflation also weighed on the greenback.
Updates:
USD/CAD daily graph with support and resistance lines on it. Click to enlarge:
Foreign Securities Purchases: Monday, 8:30. The indicator softened to GBP 10.60 billion in April, short of the forecast of GBP 12.14 billion. The downward trend is expected to continue in May, with an estimate of GBP 9.78 billion.
Manufacturing Sales: Wednesday, 8:30. The indicator improved to 1.1% in April, beating the forecast of 0.9%. The estimate for May stands at 0.8%.
CPI: Friday, 8:30. CPI softened to 0.1% in May, short of the estimate of 0.2%. This was the lowest level in 5 months. The downward trend is expected to continue in June, with an estimate of a flat 0.0%.
Core Retail Sales: Friday, 8:30. Core Retail Sales jumped 1.5% in April, crushing the estimate of 0.6%. This marked a 3-month high. The markets are expecting a much smaller gain in May, with the estimate standing at 0.4%.
Retail Sales: Friday, 8:30. The indicator improved to 0.8% in April, easily beating the estimate of 0.3%. The indicator is expected to weaken in May, with a forecast of 0.5%.
USD/CAD Technical Analysis
USD/CAD opened the week at 1.2885 and climbed to a high of 1.2943, as 1.2983 held in resistance (discussed last week).The pair then reversed directions and dropped to a low of 1.2627. USD/CAD closed the week at 1.2633.
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