For a second straight week, the Canadian dollar dropped 200 points against the US currency, with USD/CAD closing at 1.3540. This marked the pair’s highest weekly close since mid-February. There are no Canadian events this week. Here is an outlook on the major market-movers and an updated technical analysis for USD/CAD.
The US economy continues to expand at a brisk clip, as fourth quarter growth beat expectations with an excellent reading of 3.5%. However, durable goods orders were mixed. Consumer confidence also looked sharp, rising for a second straight month. In Canada, CPI indicators posted declines, but retail sales were unexpectedly strong.
Updates:
USD/CAD daily graph with support and resistance lines on it. Click to enlarge:
USD/CAD opened the week at 1.3340 and quickly dropped to a low of 1.3317. The pair then sharply reversed directions and climbed to a high of 1.3557, testing resistance at 1.3551 (discussed last week). USD/CAD closed the week at 1.3539.
Live chart of USD/CAD:
Technical lines, from top to bottom
With USD/CAD continuing to post sharp gains, we start from higher levels:
1.3911 was last tested in February.
1.3813 provided a cushion in December 2015 and January 2016.
1.3648 was an important support level in February.
1.3551 was tested in resistance and is currently a weak line. It could see action early in the week.
1.3433 was the high point in October.
1.3351 has switched to support following strong gains by USD/CAD.
1.3219 has strengthened in support.
1.3124 is the final support level for now.
I am bearish on USD/CAD
The Canadian dollar has sagged badly since mid-December and the slide could continue. With no Canadian events this week, the loonie could lose ground if US numbers meet expectations.
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