USD/CAD Forecast June 29-July 3 – Investors Eye Canadian GDP

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USD/CAD was nearly unchanged for a second consecutive weekThere are 4 releases within the upcoming week, together with GDP. Right here is an outlook on the highlights and an up to date technical evaluation for USD/CAD.

There have been no financial occasions in Canada final week. Tiff Macklem delivered his first public speech as Financial institution of Canada Governor, stating that the financial institution would proceed to make use of asset purchases applications if wanted, reasonably than unfavourable charges.

Within the U.S., manufacturing improved sharply, as Manufacturing PMI climbed from 39.Eight to 49.6 factors. The estimate stood at 50.0, which separates contraction from enlargement. Sturdy items orders sparkled in Might. The headline determine climbed 4.0%, rebounding after a decline of seven.Four %. The core studying surged 15.8%, rebounding from a learn of  -17.2% beforehand. Ultimate GDP for the primary quarter confirmed a decline of 5.0%, unchanged from the advance estimate.  Unemployment claims dropped from 2.43 million to 2.12 million, which was inside expectations. The information was not nearly as good on the buyer entrance, private spending declined by 13.6%, after a decline of seven.5% beforehand.

USD/CAD every day chart with assist and resistance traces on it. Click on to enlarge:

  1. Uncooked Supplies Worth Index: Monday, 12:30. This manufacturing inflation index continues to go south, pointing to vital weak point in manufacturing. The index posted declines of 15.6% in March and 13.4% in April. Will we see an enchancment within the Might launch?
  2. GDP: Tuesday, 12:30. Canada releases GDP each month, in contrast to different main economies, which publish GDP every quarter. In March, the financial system confirmed the consequences of Corvid-19, with a pointy decline of seven.2 %. Nonetheless, this was higher than the forecast of 9.Zero %. Analysts are braced for a fair sharper decline in April, with a forecast of -10.5 %.
  3. Commerce Stability: Thursday, 12:30. Canada continues to document commerce deficits. In April, the commerce deficit climbed to C$3.Three billion. greater than the estimate of C$2.7 billion. This marked the most important deficit since January. Will the deficit proceed to rise in Might?
  4. Manufacturing PMI: Tuesday, 13:30. The PMI has been in contraction mode since February, with three straight readings under the 50-level. Nonetheless, there was an enchancment in Might, because the PMI climbed from 33.Zero to 40.6 factors. Will the upturn proceed within the upcoming launch?

USD/CAD Technical Evaluation

Technical traces from high to backside:

We begin at 1.4019, barely above the symbolic 1.40 stage.

The spherical variety of 1.39 has been a resistance line since late Might. 1.3757 is subsequent.

1.3661 (talked about last week) has switched to a assist function after beneficial properties by USD/CAD final week. It’s a weak line.

1.3550 has strengthened in assist.

1.3420 was examined in mid-June.

1.3330 is the ultimate assist stage for now.

I’m bearish on USD/CAD

The Canadian greenback misplaced shut to five % in March however has since recovered a lot of those losses. As a minor foreign money, the Canadian greenback stays weak because of the extreme world financial circumstances. With the Canadian and U.S. economies struggling underneath the load of the Covid-19 outbreak, the Canadian greenback may face a bumpy street forward.

Additional studying:

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