USDCAD on Friday rose 0.23% to 1.40939. Week ending 2024-11-15 rose 1.34%. What’s going on.

USDCAD Analysis

Performance
Period	Pct	Chg	Momentum
Friday	0.23%	32.4 Pips
Week 2024-11-15	1.34%	186.1 Pips	November	1.14%	158.7 Pips

Upcoming key events for the new week (London Time)

Tue 01:30 PM CPI Inflation Rate (12-mth)
Thu 01:30 PM Initial Unemployment Insurance Claims

What happened over the week

In the United States, several pieces of economic data were released, reflecting both modest growth and areas of stagnation. The U.S. Monthly Retail Trade in October decreased to 0.4%, which is a decline from the revised 0.8% in September, according to the Census Bureau. This suggests a deceleration in consumer spending activity. On the other hand, the Producer Price Index (PPI) saw an increase; the monthly PPI rose to 0.2% from September’s 0%, and the 12-month PPI rose to 2.4% from 1.9%. The PPI excluding Food and Energy also experienced a rise, up to 3.1% from the previous 2.9%. This increase in PPI, reported by the Bureau of Labor Statistics, indicates rising costs for producers, potentially leading to inflationary pressures. Meanwhile, the Consumer Price Index (CPI) showed that the inflation rate remained stable with the monthly CPI unchanged at 0.2% and the 12-month CPI inflation rate increased to 2.6% from 2.4%. Notably, CPI excluding Food and Energy maintained its level with both the monthly and annual rate holding steady, suggesting core inflation pressures are stable. In labor market news, U.S. Initial Unemployment Insurance Claims modestly decreased to 217,000 from 221,000, according to the Department of Labor, highlighting a steady job market.

The impact on the USDCAD can be attributed to the relative strength seen in the U.S. dollar amidst mixed economic signals. The rise in both the PPI and CPI suggests increasing inflation pressures, which could imply future monetary policy tightening by the Federal Reserve. This anticipation can strengthen the U.S. dollar. The decrease in retail trade, however, tempers growth expectations. The Canadian dollar, in contrast, has been facing downward pressures, as highlighted by USDCAD hitting a four-year high, rising 0.23% on Friday and 1.34% for the week ending November 15. The U.S. economic data, despite being mixed, appears to position the U.S. dollar favorably against the Canadian dollar. Upcoming events like the CPI Inflation Rate report in Canada may influence the USDCAD further by providing insights into how inflationary pressures are being managed across borders. Any significant deviations in these upcoming reports could swing the exchange rates as market participants adjust their positions according to changing economic outlooks.

From X (Twitter)

The #unemployment rate was unchanged at 6.5% in October 2024, following a decline of 0.1 percentage points in September. https://t.co/4oCNHtZ5Ha pic.twitter.com/rZ0JzFkqoZ

— Statistics Canada (@StatCan_eng) November 13, 2024

What can we expect from USDCAD for the new week and what happened on Friday?

USDCAD on Friday rose 0.23% to 1.41. Price is above 9-Day EMA while Stochastic is rising. For the week ending 2024-11-15, the pair rose 1.34% or 186.1 pips higher.

Looking ahead, USDCAD looks mixed as the pair is likely to consolidate above week low of 1.39.

For the new week, our technical outlook looks bullish, immediate upside resistance level at 1.42 (WR1) with break above could target 1.42 (WR2). On the downside, we are looking at week low of 1.39 as an important support. Break below this level could weaken the current bullish momentum. A break above 1.41 would suggest bullish bias after recent positive movement.

For the month of November, USDCAD is up by 1.14% or 158.7 pips higher.

Weekly key levels to watch out:

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