USDCAD Analysis
| Week Ending 2024-10-25 | |||
| Open | High | Low | Close |
| 1.38 | 1.39 | 1.38 | 1.39 |
| Performance | ||||||
| Period | Pct | Chg | Momentum | |||
| Friday | 0.29% | 39.6 Pips |  |
|||
| Week 2024-10-25 | 0.66% | 91.4 Pips |  October |
2.69% | 363.8 Pips | |
Upcoming key events for the new week (London Time)
Wed 12:30 PM GDP annual rate
Wed 08:15 PM Bank of Canada’s Governor Tiff Macklem speech 
Thu 12:30 PM Initial Unemployment Insurance Claims Thu 12:30 PM PCE Price Index, excluding food and energy (12-mth) Fri 12:30 PM Nonfarm Payroll Employment
What happened over the week
In the United States, several key economic indicators showed mixed results. According to the University of Michigan, the Index of Consumer Sentiment saw a modest increase to 70.5 points in October from 68.9 in September, indicating a slight uplift in consumer confidence. Meanwhile, the Index of Consumer Expectations remained stable at 3% from the previous month. On the other hand, data from the Census Bureau showed varied performance in manufacturing. U.S. Durable Goods – New Orders experienced a decline in September, registering a -0.8% change compared to 0% in August, but Nondefense Capital Goods Orders excluding Aircraft recorded a positive growth, increasing to 0.5% from 0.3% in August. Durable Goods Orders excluding Transportation dropped to 0.4% from a 0.6% increase previously, and those excluding Defense improved slightly to -1.1% from -1.3%. Additionally, Initial Unemployment Insurance Claims decreased to 227,000 in the week ending 19 October, indicating a strengthening labor market.
In Canada, the economic data painted a less optimistic picture. Statistics Canada reported a decline in Retail Trade to 0.4% in August from 0.9% in July, highlighting a slump in consumer spending. More specifically, Retail Trade excluding Automobiles saw a negative turn, decreasing by -0.7% from a 0.4% increase in July. This downturn resonates with the decision taken by the Bank of Canada to reduce the Policy Interest Rate to 3.75% from 4.25%, possibly indicating an effort to bolster economic activity and counter the downturn in consumer spending and retail trade.
The movement in the USDCAD currency pair is influenced by the reported economic conditions and monetary policies in both Canada and the United States. The weakening of the Canadian retail sector, coupled with the cut in interest rates, typically exerts downward pressure on the Canadian dollar. Conversely, the U.S. displays relative economic resilience with improvements in consumer sentiment and decreasing jobless claims, giving strength to the U.S dollar. As a result, USDCAD rose by 0.29% to 1.38910 on Friday, achieving an 11-week high due to these contrasting economic indicators. Looking ahead, the upcoming speeches by the Bank of Canada’s Governor and significant U.S. economic reports such as GDP and Nonfarm Payroll Employment might further impact the USDCAD currency pair movements.
From X (Twitter)
We have lowered our policy interest rate to 3.75%.
Learn more: https://t.co/aUmYh7ac0e#economy #cdnecon pic.twitter.com/wGx8QasZwf
— Bank of Canada (@bankofcanada) October 23, 2024
What can we expect from USDCAD for the new week and what happened on Friday?
USDCAD on Friday rose 0.29% to 1.39. Price is above 9-Day EMA while Stochastic is rising. For the week ending 2024-10-25, the pair rose 0.66% or 91.4 pips higher.
Looking ahead, USDCAD looks bullish as the pair ended higher after Friday trading session.
For the new week, our technical outlook looks bullish, immediate upside resistance level at 1.39 (WR1) with break above could target 1.40 (WR2). On the downside, we are looking at week low of 1.38 as an important support. Break below this level could weaken the current bullish momentum. A break above 1.39 would suggest bullish bias after recent positive movement.
For the month of October, USDCAD is up by 2.69% or 363.8 pips higher.
Weekly key levels to watch out:
| R3 | 1.40 |
| R2 | 1.40 |
| R1 | 1.39 |
| Weekly Pivot | 1.39 |
| S1 | 1.38 |
| S2 | 1.38 |
| S3 | 1.38 |
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