The Canadian dollar was almost unchanged last week, as the Loonie remained in 1.20 area. There are four releases in the upcoming week, including GDP. Here is an outlook for the highlights and an updated technical analysis for USDCAD.
In the US, the Conference Board Consumer Confidence Consumer Confidence held solid in May, at 117.2. This was down marginally from 117.5 in April. Second-estimate GDP for the first quarter came in unchanged at 6.4%, confirming the initial reading.
Unemployment claims fell to a new post-Covid low of 406 thousand, down from 444 thousand. Durable goods orders disappointed with a read of -1.3% in April, its second decline in three months. The PCE index, the Fed’s preferred inflation gauge, jumped to 3.6% in April, up from 2.2%. This could lift the US dollar if investors believe that the Fed will consider tapering QE.
Although the Canadian dollar does not have a good track record of respecting its own price momentum, the chart below shows we have seen a firm and persistent long-term bullish trend in the USDCAD pair ever since the initial recovery from the covid-19 price shock of March 2020.
Despite of the robust long-term bearish trend, sellers should be wary of the big round number at 1.2000 which has yet to be reached. Bears should also be cautious of the fact that last week’s price range was very narrow, so it will probably be worth waiting for the price to get established below both the low and the big round number at 1.2000.
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