USDCAD Analysis
| Performance after Monday | |||||
| Period | Pct | Chg | Momentum | ||
| Monday | 0.14% | 20.1 Pips |  |
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| Week to-date | 0.15% | 21.5 Pips |  |
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| December | 1.65% | 231.1 Pips | |
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Upcoming key events (London Time)
Tue 01:30 PM CAD CPI Inflation Rate (12-mth)
Tue 01:30 PM USD Monthly Retail Trade (1-mth) Wed 07:00 PM USD Fed Interest Rate Decision (Federal Funds Rate) Wed 07:00 PM USD Interest Rate Projections
What happened lately
In the United States, the New York Empire State Manufacturing Index experienced a significant decline in December, dropping to a mere 0.2 points from a robust 31.2 points recorded in November. According to the New York Federal Reserve, this was a dramatic fall, indicating a substantial slowdown in manufacturing activity. This retreat suggests challenges in the state’s manufacturing sector, possibly due to supply chain disruptions, labor market issues, or other economic barriers affecting production and business sentiment.
In Canada, market participants are closely monitoring the upcoming release of the Consumer Price Index (CPI) inflation rate. This high-impact economic indicator will provide insights into the changing costs of goods and services and is crucial for gauging inflationary pressures within the Canadian economy. The outcomes of this release could influence the Bank of Canada’s monetary policy stance and decisions on interest rates.
The USDCAD pair might be influenced by these economic events and data releases. The fall in the New York Empire State Manufacturing Index could contribute to a weaker U.S. dollar as it reflects a deceleration in economic activity and business sentiment. If the upcoming retail trade data also indicates a slowdown, it could further exert downward pressure on the USD. Concurrently, if Canada’s CPI shows increased inflation, indicating strong underlying demand, the Canadian dollar might strengthen. Additionally, upcoming high-impact decisions from the U.S. Federal Reserve regarding interest rates and projections could be pivotal. If the Fed maintains or hints at higher interest rates, it might support the U.S. dollar by indicating tighter monetary policy to combat inflation. On the other hand, dovish signals could lead to a softer dollar. Thus, the interplay of these economic developments will likely shape the short-term trajectory of the USDCAD exchange rate.
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What can we expect from USDCAD today?
USDCAD on Monday rose 0.14% to 1.42383. Price is above 9-Day EMA while Stochastic is falling.
Updated daily direction for USDCAD looks bullish as the pair ended higher after Monday trading session.
Looking ahead for the day, immediate upside resistance level is R1 at 1.42681 with break above could target R2 at 1.4298 or figure level area. While towards the downside, we are looking at daily low of 1.42130 as an important support. Break below this level could weaken the current bullish momentum. A break above 1.42704 may suggest continuation after recent positive movement.
For the week to-date, take note that USDCAD is mixed as compared to the prior week.
Key levels to watch out:
| R3 | 1.43255 |
| R2 | 1.4298 |
| R1 | 1.42681 |
| Daily Pivot | 1.42406 |
| S1 | 1.42107 |
| S2 | 1.41832 |
| S3 | 1.41533 |
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