USD/CAD Forecast Feb. 26 – Mar. 2 – Further Rise Ahead?

Dollar/CAD ended the week on higher ground, after being rocked by contradicting Canadian figures. The upcoming week features the all-important GDP numbers. Will the pair continue higher? Here are the highlights and an updated technical analysis for USD/CAD.

Canadian retail sales plunged by 0.8% in December, much worse than expected, and this sent the pair higher. However, inflation is also rising, with 1.7% y/y in January and this sent the pair lower. In the US, the meeting minutes came out slightly more hawkish than predicted, supporting the greenback, but it wasn’t a straight line higher.

Updates:

USD/CAD daily graph with support and resistance lines on it. Click to enlarge:

Annual Budget Release: Tuesday, 21:00. The Canadian Department of Finance publishes its annual budget, which includes forecasts for growth and inflation. Higher expectations could boost the loonie.

RMPI:Wednesday, 13:30. The Raw Materials Price Index is important to Canada due to its exports of oil. The index fell by 0.9% in December and may rise now.

Current Account: Thursday, 13:30. Canada reported a current account deficit of 19.3 billion in Q3 2017 but the nation usually has deficits. A similar figure is likely now.

Manufacturing PMI: Thursday, 14:30. Markit’s purchasing managers’ index rose to 55.9 points in January, indicating faster growth in the manufacturing sector. A similar score is likely now.

Canadian GDP: Friday, 13:30. Canada releases its GDP figures once a month, and this time, the figures are for December, concluding the last quarter and the full year. After a monthly growth rate of 0.4% in November, a more modest rise of 0.1% is on the cards.

All times are GMT

USD/CAD Technical Analysis

Dollar/CAD made a move to the upside but eventually found support at 1.26, mentioned last week.

Technical lines from top to bottom:

1.30 is a round number that is eyed by many. 1.2920 was a triple top in late 2017 and continues serving as resistance.