Usdcad rises by 0.51% amid mixed economic data from U.S. and Canada

USDCAD Analysis

Performance after Tuesday
Period	Pct	Chg	Momentum
Tuesday	0.51%	72 Pips
Week to-date	0.58%	83.1 Pips
December	2.15%	301.8 Pips

Upcoming key events (London Time)

Wed 07:00 PM USD Fed Interest Rate Decision (Federal Funds Rate)
Wed 07:00 PM USD Interest Rate Projections
Thu 01:30 PM USD GDP annual rate | Q3

What happened lately

The United States’ economic indicators for November showed mixed results. U.S. Industrial Production saw a slight improvement, increasing from -0.3% in October to -0.1% in November, suggesting a marginal recovery in manufacturing and utility output. Meanwhile, U.S. Monthly Retail Trade experienced a more significant increase, rising to 0.7% from 0.4% in October, reflecting greater consumer spending. However, when considering Retail Trade excluding Automobiles, it remained steady at 0.2%, indicating subdued performance in other retail sectors. The U.S. New York Empire State Manufacturing Index experienced a drastic drop from 31.2 points in November to 0.2 points in December, signaling a sharp slowdown in manufacturing activities within the state. Sources such as the Census Bureau and New York Fed provide insights into these developments.

In contrast, Canada’s inflation indicators showed a marked decline. According to Statistics Canada, the CPI Inflation Rate year-over-year decreased slightly from 2% in October to 1.9% in November. On a month-to-month basis, Canada’s CPI Inflation Rate fell to 0% from 0.4% in October, indicating stagnation in price increases within the economy. Additionally, the Bank of Canada’s Core Inflation CPI stopped at 1.6% year-on-year in November, down from 1.7% in October, with the monthly rate tumbling into negative territory at -0.1%, significantly lower than October’s 0.4%. These figures emphasize the slowing inflationary pressures across Canada during this period.

Reflecting on the exchange dynamics, the USDCAD pair climbed by 0.51% to 1.43090. This upward movement can be attributed to diverging economic data between the U.S. and Canada. The U.S. reported stronger retail trade growth, aligning with a more robust consumer sector, while Canada exhibited weakening inflation trends that might lead the Bank of Canada to maintain accommodative monetary policies. Furthermore, upcoming high-impact economic events, particularly the Fed’s Interest Rate Decision and GDP figures, might further influence market perceptions and trading activities regarding the USDCAD rate. Market participants will be keenly observing these data releases for cues about the future policy path of the Federal Reserve, which could apply additional upward or downward pressure on the exchange rate.

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What can we expect from USDCAD today?

USDCAD on Tuesday rose 0.51% to 1.43090. Price is above 9-Day EMA while Stochastic is rising.

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

Looking ahead for the day, immediate upside resistance level is R1 at 1.43456 with break above could target R2 at 1.43822 or figure level area. While towards the downside, we are looking at daily low of 1.42280 as an important support. Break below this level could weaken the current bullish momentum. A break above 1.43234 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 0.58% over the past few days.

Key levels to watch out:

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