The USD/CAD pair rebounded to the upside last week in volatile trading amid the high level of uncertainty that is surrounding the outlook of the European debt crisis on renewed fears that Greece could be facing a disorderly default.
Meanwhile, economic data from the United States showed mixed results, however, markets were focused on the Jobs report for October, which signaled that job growth is still weak in the United States, although unemployment fell unexpectedly to 9.0%, the lowest level since April.
Meanwhile, data from Canada proved to be mixed as well, where GDP expanded better than expectations, however, employment data disappointed investors, as unemployment rose unexpectedly in October to 7.3%, as Canadian employers shed 54 thousand jobs.
Traders are likely to use next week to adjust their positions as they will reflect on the recent data from Europe and the United States, where the retail sales report will be released from both Europe and the United States.
The high level of uncertainty in markets could provide the USD/CAD pair with more bullish momentum, where traders will be eyeing developments in Greece, and accordingly, we should expect Europe to dominate the pair’s movement next week. Nonetheless, if optimism spreads through markets, the USD/CAD pair will decline, as demand for higher yielding assets is likely to rise in that case, and that should provide the Canadian dollar with momentum.
Highlights for this week that will probably affect the USD/CAD pair’s direction are:
Monday November 07:
At 20:00 GMT the United States is expected to release the consumer credit figure for September, which could have improved to $5.100 billion from -$9.501 billion.
Tuesday November 08:
Canada will release the housing starts index for October at 12:15 GMT, where housing starts are expected to ease to 200.0 thousand, compared with the prior estimate of 205.9 thousand in September.
Wednesday November 09:
Canada will release the new housing price index for September at 12:30 GMT, where the index is expected to rise by 0.1% in line with the prior rise.
The United States will start the session at 15:00 GMT with the wholesale inventories for September, with expectations that the index could have expanded by 0.6% from 0.4%.
Thursday November 10:
Canada will release the international merchandise trade balance for September at 12:30 GMT, which is expected to show the deficit narrowed to 0.52 billion CAD, compared with the prior deficit of 0.62 billion CAD.
The United States will join the session at 13:30 GMT with the import price index for October, where the monthly index is expected to expand by 0.2% from 0.3%, while the previous annual reading was 13.4%.
The Untied States will also release the trade balance figures for September, with expectations that the trade deficit could have widened to $46.2 billion from $45.6 billion.
The United States will also provide the initial jobless claims figure (November 5), with expectations that the number of claims could have increased to 400 thousands from 397 thousands.
At 19:00 GMT theUnited Stateswill join again with the monthly budget statement for October, where the budget deficit could have narrowed to $110.7 billion from $140.4 billion.
Friday November 11:
The United States will start the session at 14:55 GMT with the University of Michigan confidence in a preliminary reading for November, with expectations that the confidence could have slightly improved to 61.0 from 60.9.
