The Loonie continues to soar

The CAD had the best gain of the week against the USD..What's next?


The US Dollar was lower against most of its major pairs on Friday. On the U.S. economic data front, retail sales gained 1.2% on month in July, below the 2.1% estimate from 7.5% in June. Industrial production gained 3% on month in July, in-line with estimates, from a gain of 5.4% in June. Finally the University of Michigan Consumer Sentiment index rose to 72.8 in a preliminary August reading, above the 72 estimate compared to 72.5 in the July final reading. On Monday, we can expect the U.S. Empire State Manufacturing Survey to decline to 14.5 in August from 17.2 in July.

The Euro was bullish against all of its major pairs with the exception of the AUD and JPY. In Europe, the European Commission has reported 2Q GDP at -12.1% (vs -3.6% in 1Q) and June trade balance at 17.1 billion euros surplus (vs 14.5 billion euros surplus expected). France's INSEE has posted final readings of July CPI at +0.8% on year, as expected.

The Australian dollar was higher against all of its major pairs.

Looking at weekly performance, the CAD had the best performance against the USD (+0.64%) and the NZD was under the most pressure (-0.71%).

On a daily chart,  the trend remains in play. Price action remains inside a bearish channel. The pair broke key support at the $1.332 area which was resistance back in 2019. The MACD is also trending lower indicating downside momentum. Look for a continuation lower to test Jan lows near $1.2955 unless the pair can make a reversal above the upper declining trend line and the 20-day moving average. 

Source: GAIN Capital, TradingView

Happy Trading

More from Forex

From time to time, GAIN Capital Australia Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.

As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.