USD continued moving higher surrounded by the BOC decision and decrease in oil prices. The jobs report stands out in a busy week. Here are the highlights and an updated technical analysis for USD/CAD.(daily forex signals)
The Bank of Canada puts a positive way by removing warnings on increasing rates and the need for obliging monetary policies. An add-on with this they were confident about wages and Q1 growth rate. The Q1 growth expectation proved wrong as quarterly GDP raised by only 1.3% annually. The C$ raised on the BOC and fell on GDP. Afterward, Trump came up with the execution of tariffs on steel and aluminum. This puts Canada on a fire which retaliated immediately. The Canadian dollar comprehended its falls. Oil prices decreased following the hints from OPEC and non-OPEC members that they will increase production. This weighed on the loonie.
1. Labor Productivity: On Tuesday at 12:30, high growth is good for the economy but lower inflation anticipated and with the result to this leads to the central bank on hold. An increase of 0.2% was seen in productivity in the last quarter of 2017. We will now get the figures for Q1. A small increase of 0.3% is on the cards.
2. Ivey PMI: On Tuesday at 14:00, Around 175 purchasing managers have been contemplated by The Richard Ivey School of Business for its monthly survey. For April, they reported a hike to 71.5 points, showing very strong growth. A decrease from these hikes is likely: 69.7 is expected.
3. Trade Balance: On Wednesday at 12:30, Canada has a rising trade deficit that reached 4.1 billion in March, a multi-year high. Another deficit is likely for April.
4. Building Permits: On Wednesday, 12:30. The figures are quite turbulent but it can still provide a hint about the housing sector. After a decrease of 2.8% in February, the number of starts bounced back 3.1% in March. Recent figures have been quite solid.
5. Housing Starts: Thursday, 12:15 With a Contrary to the above figure, this one is more relatable. Annualized starts of new homes fell short of prediction in April and stood at 214K. The fresh figures for May may see an inflation. A small increase to 217K is projected.(forex singapore)
6. BOC Financial System Review: The financial system has been reported by The Bank of Canada for its stability twice a year. The report was seriously watched just after the financial crisis which was faced by the Canadian banks quite well. With developing concerns about exalted house prices, any concerns raised here may weigh on the loonie.
7. Canadian jobs report Friday, 12:30. Canada's labor market report will be in the highlights, having a special influence on USD/CAD as the US Non-Farm Payrolls report has already been published. Back in April, Canada lost 1,100 jobs, a discouraging result. A bounce back is likely now. The unemployment remained at 5.8% for the third month in a row.
8.Capacity Utilization Rate: Friday, 12:30 Depressed by the jobs report, the figure matters nonetheless as the BOC cares about the level of stagnancy in the economy. The level of utilization reached a peak of 86% in Q4 2017, indicating less stagnancy than Assumed. A similar figure is likely for Q1.
USD/CAD Technical Analysis
Dollar/CAD tackled the 1.30 level (mentioned last week) but struggled to make a meaningful break in a very tempestuous week.
Technical lines from top to bottom:
1.3180 was a support line in 2017 and now turns into resistance. 1.3125 is the high point for 2018 so far. 1.3050 was the high point in May and also earlier in the year.
1.30 is a round number that is eyed by many. 1.2920 capped the pair in late April and early May as well. 1.2810 served as support in early May.
1.2730 was a swing low seen mid-May. It is followed by 1.2690 which was a swing high back in February. Further down, 1.2615 and 1.2535 where the top and bottom of a range seen in early April.
I remain bullish on USD/CAD
The trade war could bury NAFTA negotiations. Even if it doesn’t, trade wars could weigh on the Canadian economy which is dependent on the US. source
