CAD Weekly Forecast (Mar. 2 – 6)

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Lower oil prices and risk appetite did the Loonie damage last week. Can this week’s catalysts tempt market bulls into action?

BOC’s policy statement (Mar 4, 3:00 pm GMT)

Bank of Canada (BOC) maintained its interest rates at 1.75% as expected
What markets didn’t expect was for Governor Poloz to hint at a rate cut if the current economic slowdown persists
Analysts see the BOC maintaining its policies steady for another month in March
Watch the presser at 5:45 pm GMT to see how close BOC is to its first rate cut since July 2015

A net of 34,500 jobs were added in January, as 35,700 found full-time work while 1,200 lost part-time jobs. Analysts only saw a 15,000 increase
Unemployment rate edged lower from 5.6% to 5.5% for the month
The better-than-expected numbers boosted CAD against its major counterparts
Markets see an additional 10,000 net jobs increase in February
Unemployment rate could edge back up to 5.6%
The IVEY PMI, usually a leading indicator for the labor market, won’t be released until 3:00 pm GMT

Canada’s trade deficit narrowed from 1.2B CAD to 0.4B CAD in December, better than forecasts of a 0.6B CAD shortfall
Exports had risen by 1.9% thanks to a surge in crude oil sales, while imports inched 0.2% higher on consumer goods purchases
The report, along with positive risk sentiment, propped CAD higher across the board

Key members of the Organization of the Petroleum Exporting Countries (OPEC) are meeting in Vienna on Thursday and Friday and markets expect additional production cuts to be on the table
Word around is that Saudi Arabia is pushing for an additional cut of one million barrels per day
Inaction will likely inspire selloff of the Black Crack

- Updates on new Coronavirus cases will continue to affect the demand for high-yielding currencies like CAD

It’s also U.S. NFP week, which could direct focus on USD’s overall trends and retracements
Economic themes, such as PMI releases from other major economies, a “Super Tuesday” in the U.S., and Brexit trade negotiations can also affect overall risk-taking

Stochastic is flagging CAD’s “oversold” conditions against CHF, JPY, EUR, and USD on the daily time frame
CAD is nearly (but not quite) “overbought” against AUD and NZD

AUD/CAD, CAD/CHF, CAD/JPY, and NZD/CAD are all trading below their short AND long-term SMAs on the daily
EUR/CAD is trading above its short and long-term SMAs
GBP/CAD is trading above its 200 SMA but below its shorter-term SMAs
USD/CAD is a hair’s breadth away from trading above its short and long-term SMAs

Missed last week’s price action? Read CAD’s price recap for February 24 – 28!