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Forex - USD/CAD weekly outlook: May 3-7

Published 05/02/2010, 07:44 AM
USD/CAD
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Investing.com – During volatile trading, the U.S. dollar jumped against its Canadian counterpart last week, rising up above parity amid falling Canadian factory prices and growing fears over Greece's debt crisis.

USD/CAD reached 1.0179 at the close of trade on Friday, gaining 1.83% on a weekly basis. The pair is likely to find resistance at 1.0303, the high of March 26, and support at 0.993, the low of April 21 and a 22-month low.

Next week, Canada is set to publish key data on its construction sector, unemployment rate and employment change. A closely watched industry survey on business conditions for the country's purchasing managers is also scheduled to be released. In addition, a senior Bank of Canada official is due to speak at a public engagement.

Meanwhile, the United States is due to publish important reports on consumer price inflation, pending home sales, nonfarm employment change, unemployment claims and its unemployment rate. Key industry data is also set to be released on the U.S. manufacturing sector.

Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect USD/CAD.

Monday, May 3

The Institute for Supply Management, an industry group, will publish a PMI for the U.S. manufacturing sector. The United States, meanwhile, will publish a slew of economic reports on personal spending, personal income, consumer price inflation, construction spending and vehicle sales.

Tuesday, May 4

The National Association of Realtors, a U.S. industry group, will publish a report on pending home sales, a leading indicator of the housing market's health and that of the entire U.S. economy. The U.S. will also publish monthly data on factory orders, a leading indicator of production.

Wednesday, May 5

Also Wednesday, the payroll processing firm ADP will publish a key report on U.S. nonfarm employment change and the Institute of Supply Management will release a non-manufacturing PMI.

Later Wednesday, the U.S. will publish a report on crude oil inventories, which also affects Canada, due to the country's sizable energy sector.

Thursday, May 6

Canada will publish monthly data on the change in the number of building permits issued, a key gauge of future construction activity. Later in the day, the Richard Ivey School of Business will publish PMI data for Canada.

The United States will publish a weekly report on initial jobless claims, an important signal of overall economic health.

Later in the day, U.S. Federal Reserve Chairman Ben Bernanke is due to speak at an event in Chicago. Traders are likely to scrutinize his comments for clues to future shifts in monetary policy.

Friday, May 7

John Murray, a deputy governor at the Bank of Canada, is set to speak at the University of Alberta in Edmonton.

Later Friday, Canada and the United States will release data on their unemployment rates and unemployment change. The U.S. will also publish reports on average hourly earnings and consumer credit.

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