Usd/Cad rises 0.15% amid mixed US economic signals and stagnant Canadian GDP

USDCAD Analysis

Performance after Thursday
Period	Pct	Chg	Momentum
Thursday	0.15%	20.3 Pips
Week to-date	0.23%	31.7 Pips
October	2.96%	400.1 Pips

Upcoming key events (London Time)

Fri 12:30 PM USD Nonfarm Payroll Employment

What happened lately

In the United States, economic data reveals mixed signals for September and the third quarter. U.S. Personal Income rose by 0.3%, exceeding the previous month’s increase of 0.2%, according to the Bureau of Economic Analysis. However, the U.S. GDP growth decelerated to 2.8% from 3.0% in the prior quarter. On the inflation front, the PCE Price Index, a key indicator for consumer spending, indicated a minimal monthly increase from 0.1% to 0.2% in September, though on a yearly basis, it eased slightly from 2.2% to 2.1%. The core PCE, excluding food and energy, rose to 0.3% for the month, with its year-over-year rate unchanged at 2.7%. Consumer spending saw a decrease, and the Employment Cost Index marginally declined from 0.9% to 0.8%. Despite weakening areas, U.S. unemployment claims dropped to 216,000 from 227,000, suggesting labor market resilience. Notably, pending home sales registered a significant rise of 7.4%, rebounding strongly from August’s 0.6% increase.

In Canada, economic performance appears stagnant as indicated by the monthly GDP data from Statistics Canada. August’s GDP growth was flat at 0%, compared to a previously revised increase of 0.1% in July from 0.2% initially reported. This stagnation points to a potential cooling in the Canadian economy, further exacerbated by uncertainties in global trade and domestic sectors.

Considering the data from both countries, USDCAD dynamics are impacted by these economic indicators. The U.S. data mix of modest income growth and reductions in both GDP and inflation indices could hint at a cooler economic trajectory, possibly leading to future monetary policy adjustments. The decline in Canada’s GDP growth rate heightens economic vulnerabilities. Consequently, USDCAD increased by 0.15% to 1.39273, ending October up by 2.96%. The potential expectation of a U.S. nonfarm payroll data release could further influence this exchange rate, as strong payroll figures typically strengthen the U.S. dollar due to anticipated policy tightening by the Federal Reserve. Meanwhile, the relative weakness in Canadian economic performance could sustain the upward pressure on USDCAD.

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What can we expect from USDCAD today?

USDCAD on Thursday rose 0.15% to 1.39273. Price is above 9-Day EMA while Stochastic is falling.

Updated daily direction for USDCAD looks bullish as the pair ended higher after Thursday trading session.

Looking ahead for the day, immediate upside resistance level is R1 at 1.39527 with break above could target R2 at 1.39782 or figure level area. While towards the downside, we are looking at daily low of 1.38870 as an important support. Break below this level could weaken the current bullish momentum. A break above 1.39453 may suggest continuation after recent positive movement.

For the week to-date, take note that USDCAD is bullish as the pair continued to trade higher and is up by 0.23% over the past few days.

USDCAD ended month of October trading session up by 2.96% or 400.1 pips higher.

Key levels to watch out:

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