hello,
Latest readings of macroeconomic data showing in what condition is the Canadian economy shows that Canadians already have the worst behind them.
Wholesale trade, April 2014
Wholesale sales rose 1.2% to $51.2 billion in April following a decline in March. Higher sales were recorded in all subsectors except for food, beverage and tobacco. The subsectors that rose in April accounted for 80% of wholesale sales. In volume terms, wholesale sales were up 1.2%.
The largest gain in April was in the building material and supplies subsector (+3.6%), which rose for a fourth consecutive month to reach $7.4 billion. All of the subsector's industries recorded higher sales, with the lumber, millwork, hardware and other building supplies industry (+4.4%) contributing the most to the gain. This was the fifth consecutive increase for this industry. Exports of forestry products and building and packaging materials rose significantly in April.
Monthly Survey of Manufacturing, April 2014
Manufacturing sales edged down 0.1% in April to $50.9 billion, the first decrease in four months. Declines in the petroleum and coal product, aerospace product and parts, and machinery industries were largely offset by smaller gains in most other industries. In April, 14 of 21 industries representing about 60% of manufacturing posted gains, despite the slight decrease in total sales. Constant dollar sales rose 0.4% in April, indicating an increase in the volume of goods sold.
May 2014 Housing Starts in Canada
Housing starts in Canada were trending at 184,438 units in May compared to 183,872 in April, according to Canada Mortgage and Housing Corporation. The trend is a six-month moving average of the monthly seasonally adjusted annual rates of housing starts.
Labour Force Survey, May 2014
Employment edged up by 26,000 in May, driven by gains in part-time work. The unemployment rate increased 0.1 percentage points to 7.0% as there were more people in the labour market. Overall employment growth has been subdued since August 2013. In the 12 months to May, employment increased by 86,000 or 0.5%, with all the growth in part time. Over the same period, the number of hours worked was little changed.
Consumer Price Index, May 2014
The Consumer Price Index (CPI) rose 2.3% in the 12 months to May, following a 2.0% increase in April. Excluding energy, the CPI advanced 1.7% year over year in May, after rising 1.4% the previous month. <more info>.
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| chart 1. Technical analysis of USD/CAD, Weekly, 2014-07-07 |
At the moment we are in a very important spot on the chart. Determined move in the next few days whichever direction should shape the sentiment on the currency pair in the coming weeks. I mean the levels marked on the chart by the red rectangle (bottom) and the trend line.
In my view, however, these levels should be in the next few days to stop the strengthening of the Canadian dollar and return to the main trend, which is the strengthening of the U.S. dollar. In the event when the price overcome an indicated levels, next suport level is 1.0446. Overcoming this resistance also opens the way to the levels from 2011.
Canadian dollar is sensitive to changes in the interest rate differential, which should grow in the United States. therefore My recommendation for USDCAD is target level 1.1600 - 1.1650 in this year.
best regards,
oscarjp
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