USD/CAD reversed directions last week and posted a sharp gain of 170 points. The pair closed the week at 1.3481. This week’s key events are retail sales reports and GDP. Here is an outlook on the major market- movers and an updated technical analysis for USD/CAD.

Last week’s US data was soft. Construction numbers were mixed and manufacturing and employment numbers missed their estimates. In Canada, CPI was unchanged, posting a weak gain of 0.2%.

Updates:

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

1. Wholesale Sales: Monday, 12:30. Wholesale Sales soared 3.3% in February, crushing the estimate of 0.3%. Another strong gain is expected in March, with an estimate of 2.1%.
2. Core Retail Sales: Wednesday, 12:30. This is the first key event of the week. The indicator climbed 1.7% in February, above the forecast of 1.3%. This was the strongest gain in over two years. Will the indicator repeat with another strong performance in March?
3. Retail Sales: Wednesday, 12:30. Retail Sales is the primary gauge of consumer spending. The indicator bounced back in February with a strong gain of 2.2%, above the estimate of 1.5%.
4. GDP: Friday, 12:30. GDP, which is released monthly, is one of the most important economic indicators and should be treated as a market-mover. In January, the economy expanded 0.6%, above the forecast of 0.3%. This marked its best showing since June 2016.
5. RMPI: Friday, 12:30. This manufacturing inflation index continues to soften, and dropped to 1.2% in February. Still, this beat the estimate of 0.8%. Will we see a stronger reading in March?

USD/CAD Technical Analysis

USD/CAD opened the week at 1.3312 and quickly dropped to a low of 1.3260. Late in the week, the pair climbed to a high of 1.3525, as resistance held firm at 1.3551 (discussed last week). USD/CAD closed the week at 1.3481.

Technical lines, from top to bottom

We start with resistance at 1.3859. This line has held since February 2016.

1.3757 is next.

1.3648 was an important support level in February 2017.

1.3551 is the next line of resistance.

1.3457 was a high point in September 2015.

1.3351 remains busy and has switched to a support role.

1.3212 was a cap in the second quarter of 2016.

1.3124 is the final support level for now.

I am bullish on USD/CAD

President Trump’s first 100 days in office hasn’t been much of a success, but the US economy remains in good shape.