USDCAD Analysis
| Performance after Thursday | |||||
| Period | Pct | Chg | Momentum | ||
| Thursday | 0.58% | 83 Pips |  |
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| Week to-date | 0.75% | 107.9 Pips |  |
||
| January | 1% | 143.2 Pips | |
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Upcoming key events (London Time)
No major events for the day.
What happened lately
The data indicates mixed economic signals from the United States. The U.S. Pending Home Sales saw a decrease in December, falling to -5.5% from a previously revised figure of 1.6% in November, highlighting potential weakening in the housing market. Additionally, U.S. GDP’s annual rate in the Q4 flash estimate moderated to 2.3%, lower than the 3.1% reported in Q3. However, the U.S. economy exhibited some resilience with a decrease in Initial Unemployment Insurance Claims to 207K for the week ending 25 January, signaling labor market stability. Inflation, as per the PCE excluding food and energy, rose to 2.5% in Q4, while the GDP Price Index saw a slight increase to 2.2%, possibly hinting at steady inflationary pressures. Meanwhile, the Federal Reserve maintained the Federal Funds Rate at 4.5%, indicating a cautious monetary stance possibly due to observed deceleration in GDP growth.
In contrast, Canada saw a reduction in its Bank of Canada Policy Interest Rate, which declined to 3% from a previous 3.25%, likely indicating efforts to stimulate economic activity amidst subdued economic conditions. This change signifies a more accommodative monetary policy, possibly reacting to domestic economic challenges or weaker inflation prospects.
The implications of these developments on USDCAD are significant. The USDCAD pair rose 0.58% to 1.44930, reflecting the intricate balancing of currency dynamics between the two nations. The divergence in monetary policy approaches—with the U.S. holding rates steady and Canada cutting theirs—could lead to continued strengthening of the USD against the CAD. Weaker U.S. GDP growth could mute this effect slightly, but with labor market resilience and rising confidence in the U.S., the USD may remain stronger relative to the CAD in the near term, affecting currency traders’ perceptions and future movements of the exchange rate.
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What can we expect from USDCAD today?
USDCAD on Thursday rose 0.58% to 1.44930. Price is above 9-Day EMA while Stochastic is falling.
Updated daily direction for USDCAD looks bullish as the pair ended higher after Thursday trading session.
Looking ahead for the day, immediate upside resistance level is R1 at 1.45936 with break above could target R2 at 1.46942 or figure level area. While towards the downside, we are looking at daily low of 1.43940 as an important support. Break below this level could weaken the current bullish momentum. A break above 1.45944 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 | 1.4794 |
| R2 | 1.46942 |
| R1 | 1.45936 |
| Daily Pivot | 1.44938 |
| S1 | 1.43932 |
| S2 | 1.42934 |
| S3 | 1.41928 |
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