USDCAD Analysis
| Performance after Thursday | |||||
| Period | Pct | Chg | Momentum | ||
| Thursday | -0.54% | -75 Pips |  |
||
| Week to-date | -0.39% | -54.8 Pips | |
||
| November | -0.51% | -71.2 Pips |  |
||
Upcoming key events (London Time)
Fri 01:30 PM CAD Labour Force Net Change in Employment
What happened lately
In the United States, a series of significant economic updates have been reported. Firstly, the Federal Reserve lowered the Federal Funds Rate to 4.75% from the previous 5%, indicating a monetary policy shift towards more accommodative conditions. Simultaneously, the preliminary estimate for Unit Labor Costs in the third quarter saw a substantial downward revision to 2.4% from 0.4%, suggesting a moderation in wage growth pressure. In labor markets, initial unemployment insurance claims increased slightly, reaching 221,000 from the previously revised 218,000, signaling marginal changes in the employment landscape. Meanwhile, U.S. Nonfarm Business Labor Productivity dipped to 2.2% in Q3, compared to 2.5% in Q2, highlighting slight productivity challenges. Additionally, on the political front, Donald Trump won the 2024 U.S. Presidential election, securing victory over Kamala Harris and preparing to serve as the 47th President of the United States.
Canada experienced a slight decline in its economic indicators, particularly evident in the Ivey Purchasing Managers Index. The index, when seasonally adjusted, dropped to 52 in October from 53.1 in September, reflecting a deceleration in business activity levels. Notably, this decline also occurred in the unadjusted index which fell to 52.2 from 54.5 over the same period. These figures suggest a slowing expansion pace within the Canadian economy, adding to the recent cautious economic sentiment.
The reported economic developments have implications for the USDCAD currency pair. The reduction in the U.S. interest rate by the Federal Reserve, alongside a downward revision in unit labor costs, suggests a potentially more dovish U.S. economic outlook. This can exert downward pressure on the U.S. dollar in the forex market. Meanwhile, Canada’s slight deceleration in the Ivey PMI could impact investor confidence in the Canadian economy. As a result, the pair dropped by 0.54% to 1.38640 on Thursday. Future movements of USDCAD will likely remain sensitive to upcoming U.S. and Canadian economic data releases, such as Canada’s Labour Force Net Change in Employment, which could provide new directional cues.
Latest from X (Twitter)
What can we expect from USDCAD today?
USDCAD on Thursday dropped -0.54% to 1.38640. Price is below 9-Day EMA while Stochastic is falling.
Updated daily direction for USDCAD looks bearish as the pair posted lower in Thursday trading session.
Looking ahead for the day, immediate support level is at S1 1.3818 with break below could see further selling pressure towards S2 at 1.37719. To the upside, with the current momentum bearish, we prefer to look at breakout of the recent daily high of 1.39481 as a potential indicator of buying interest. Failure to break the resistance level would continue to echo bearish sentiment. A close below 1.38370 would indicate selling pressure.
For the week to-date, take note that USDCAD is bearish as the pair posted lower by -0.39%.
Key levels to watch out:
| R3 | 1.40402 |
| R2 | 1.39941 |
| R1 | 1.39291 |
| Daily Pivot | 1.3883 |
| S1 | 1.3818 |
| S2 | 1.37719 |
| S3 | 1.37069 |
#USDCAD Trending on Twitter
[custom-twitter-feeds hashtag=”#USDCAD” num=3 showheader=false]