USDCAD on Friday rose 0.31% to 1.44473. Week ending 2025-01-03 rose 0.3%. What’s going on.

USDCAD Analysis

Performance
Period	Pct	Chg	Momentum
Friday	0.31%	44.3 Pips
Week 2025-01-03	0.3%	43.9 Pips	January	0.68%	97.5 Pips

Upcoming key events for the new week (London Time)

Wed 07:00 PM FOMC Meeting Minutes
Fri 01:30 PM Labour Force Net Change in Employment
Fri 01:30 PM Nonfarm Payroll Employment

What happened over the week

In the United States, recent economic data showed a decrease in Initial Unemployment Insurance Claims for the week ending December 28. The claims fell to 211,000, down from the previous revised figure of 220,000, as reported by the Department of Labor. This decrease suggests a strengthening labor market as fewer individuals filed for unemployment benefits. Additionally, the U.S. Federal Housing Finance Agency (FHFA) reported a slowing in the House Price Index for October, which decreased to 0.4% from September’s 0.7%. This deceleration in house price growth might indicate cooling in the housing market, which could impact consumer spending and overall economic growth.

Regarding the currency market, USDCAD rose by 0.31% on a Friday to reach 1.44473. Over the week ending January 3, 2025, it increased by 0.3%, continuing from its upward trend evident throughout December, where it rose by 2.69%. USDCAD reached a four-year high, the highest level since March 25, 2020. In 2024, USDCAD had a cumulative rise of 8.5% for the year. This long-term trend reflects growing strength in the U.S. dollar against the Canadian dollar, influenced by divergent economic performances and monetary policy expectations between the two countries.

Upcoming economic events of note include the FOMC Meeting Minutes on Wednesday, which could provide insights into future monetary policy moves in the U.S., potentially impacting the USD’s strength. On Friday, both Canada and the U.S. release crucial labor market data with Canada’s Labour Force Net Change in Employment and the U.S.’s Nonfarm Payroll Employment report. These reports are likely to cause volatility in the USDCAD pair; the Canadian labor data may provide insights into economic health and potential Bank of Canada monetary responses, while the U.S. jobs report will be closely watched for indications of economic momentum and its implications for Federal Reserve policy.

From X (Twitter)

Real gross domestic product (GDP) increased 0.3% in October 2024, following a 0.2% increase in September. https://t.co/2LJDm632f3 pic.twitter.com/PoHcr8pqLG

— Statistics Canada (@StatCan_eng) December 23, 2024

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

USDCAD on Friday rose 0.31% to 1.44. Price is above 9-Day EMA while Stochastic is rising. For the week ending 2025-01-03, the pair rose 0.3% or 43.9 pips higher.

Looking ahead, USDCAD looks mixed as the pair is likely to consolidate above week low of 1.43.

For the new week, our technical outlook looks bullish, immediate upside resistance level at 1.45 (WR1) with break above could target 1.45 (WR2). On the downside, we are looking at week low of 1.43 as an important support. Break below this level could weaken the current bullish momentum. A break above 1.45 would suggest bullish bias after recent positive movement.

For the month of January, USDCAD is up by 0.68% or 97.5 pips higher.

Weekly key levels to watch out:

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Construction Spending Source: Census Bureau