Canada’s manufacturing sector slumped badly in August. Manufacturing sales plunged 9.2%, much worse than the estimate, or -4.4 percent. Foreign securities purchases dropped by C $ 9.7 billion in March, after an excellent the gain, or the C $ 20.6 billion a month earlier.
In the U. s., the inflation remained flat in April, while the economy continues to sag under the weight of the Corvid-19 pandemic. The CPI fell by 0.8%, down from -0.4% a month earlier. The kernel is read, it fell 0.4%, down from -0.1% in the previous version. Both figures missed their estimates. Unemployment claims continue to fall, and fell below 3 million last week, with an output of 2.98 million. Still, this missed the estimate, or $ 2.5 million. Retail sales were a blood bath in April, the figure fell by 16.4%, while the core is read, it is down 17.2%. Analysts had expected declines, or -12.0% for the title, and 16.4 ‘ for the basic version.
USD/CAD daily chart with support and resistance lines. Click to enlarge:
- Inflation: Wednesday, 12: 30 pm. Annual consumer inflation fell 0.6% in January, its sharpest decline since the month of December 2014. The core CPI slowed to 0.1%, down from 0.7% a month earlier. We now await the April data.
- ADP Non-Farm Employment Change: Thursday, 12: 30 pm. The December release was a disaster, with a staggering drop of 177.3 thousand. Are we going to see an improvement in the April release?
- Retail: Friday, 12: 30 pm. Retail sales is the main indicator of consumer spending. In January, the headline figure came in at a flat 0.0%, shy of the forecast, or 0.3%. The kernel is read, there was a slight decrease of 0.3%, matching the estimate. The Soft numbers for the month of April could weigh on the Canadian dollar.
USD/CAD Technical Analysis
Technical from top to bottom:
1.4480, has been an important cushion at the end of the month of April 2000. 1.4310 is the following.
1.4159 (mentioned last week), has been under pressure last week, as USD/CAD has posted strong gains.
1.4019, this is the offer of support.
The number of the round of 1.39 has a little bit of respite and support.
1.3757 is the last support line for now.
I remain bullish on the USD/CAD pair
The outlook for the Canadian dollar remains positive in the short term. The economic conditions in Canada remain very low due to the Covid or 19, and if this week’s inflation and retail sales miss expectations, USD/CAD could gain ground.
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