Canada’s GDP remained unchanged at Zero.2% in June. This edged above the forecast of Zero.1%, however the achieve was not sufficient to spice up the torpid Canadian greenback. The present account commerce deficit narrowed to C$-6.four billion, the smallest deficit since 2008.
Over within the U.S. the spotlight of the week was second-estimate GDP for Q2, which got here in at 2.Zero%, matching the estimate. This was a slight downward revision from preliminary estimate, which got here in at 2.1%. It’s evident that second-quarter development will likely be considerably weaker than Q1, and additional price cuts may very well be within the works within the the rest of 2019. Sturdy items orders improved to 2.1%, up from 2.Zero% a month earlier. Nevertheless, core sturdy items orders declined by Zero.four%, the primary decline in six months. The week wrapped up with UoM shopper confidence, which dropped sharply to 89.eight in July, down from 98.four in June. This marked the primary time that the important thing confidence indicator has dropped beneath the 90-level since October 2014.
USD/CAD every day chart with help and resistance strains on it. Click on to enlarge:
Manufacturing PMI: Tuesday, 13:30. Markit’s buying managers’ index for the manufacturing sector improved barely to 50.2 in July, after three successive contractions. Will we see one other enlargement in August?
Commerce Steadiness: Wednesday, 12:30. Canada posted a small surplus in June of C$Zero.1 billion, above the forecast of C$-Zero.three billion. One other small surplus is anticipated in July, with a forecast of C$Zero.2 billion.
BoC Price Determination: Wednesday, 14:00. The BoC final raised charges again in October, and no change is anticipated to the present price of 1.75%. Buyers will likely be preserving an in depth eye on the speed assertion – a dovish assertion might ship the Canadian greenback decrease.
Employment Knowledge: Friday, 12:30. Employment change declined by 24.2 thousand in July, stunning the markets, which had forecast a achieve of 15.2 thousand. Will we see a rebound within the August launch? The unemployment price jumped to five.7% in July, up from 5.5% a month earlier. We are going to now obtain knowledge for August.
* All occasions are GMT
USD/CAD Technical Evaluation
Technical strains from prime to backside:
1.3665 was the excessive for 2018. 1.3565 is the subsequent resistance line.
1.3445 has held in resistance for the reason that first week of June. That is adopted by 1.3385.
1.3350 has held regular since mid-June. It was below some stress throughout the week.
1.3265 remained related this week. It begins the brand new trading week as a weak help degree.
1.3175 is the subsequent line of help.
1.3125 (talked about final week) has held in help for the reason that finish of August. 1.3048 follows.
1.2916 is the ultimate help degree for now.
I stay bullish on USD/CAD
The Canadian greenback continues to lose floor, because the forex has registered seven successive shedding weeks. Fears of a recession within the U.S. have dampened danger urge for food, and the continuing U.S-China commerce struggle won’t assist issues. The Financial institution of Canada is extensively anticipated to carry charges, and if the speed assertion or follow-up feedback from BoC Governor Stephen Poloz are dovish, the pair’s upward motion might proceed.
Get the 5 most predictable forex pairs