USDCAD Analysis
| Week Ending 2025-02-21 | |||
| Open | High | Low | Close |
| 1.42 | 1.42 | 1.42 | 1.42 |
| Performance | |||||
| Period | Pct | Chg | Momentum | ||
| Friday | 0.39% | 54.9 Pips |  |
||
| Week 2025-02-21 | 0.33% | 46.9 Pips |  |
||
| February | -1.81% | -262.1 Pips |  |
||
Upcoming key events for the new week (London Time)
Thu 01:30 PM GDP annual rate
Fri 01:30 PM GDP (12-mth) Fri 01:30 PM PCE Price Index, excluding food and energy (12-mth)
What happened over the week
In Canada, the retail trade rose by 2.5% in December, marking a significant increase from November’s stagnant figure, according to Statistics Canada. Retail trade excluding automobiles exhibited an even more substantial rise of 2.7% compared to a negative growth of -0.7% in November. The Consumer Price Index (CPI) inflation rate edged up to 1.9% in January, while the monthly CPI rate improved to 0.1% from -0.4% in December. The Bank of Canada’s core inflation measure reached 2.1% year-on-year, reflecting their efforts to mediate price stability within the target range. These strong retail and inflation metrics indicate robust consumer spending and inflation pressures which could influence future monetary policy decisions by the Bank of Canada.
In the United States, consumer sentiment saw a decline, with the Index of Consumer Sentiment dropping from 67.8 points in December to 64.7 points in January, reported by the University of Michigan. However, the Index of Consumer Expectations showed a slight improvement, moving from 3.3% to 3.5% over the same period. The labor market showed signs of potential slowdown as initial unemployment insurance claims rose to 219K, up from 213K the previous week, reported by the Department of Labor. On the manufacturing side, the Philadelphia Fed’s Manufacturing Business Outlook Survey registered a substantial decrease, dipping from 44.3 points in January to 18.1 in February. Meanwhile, the New York Empire State Manufacturing Index increased to 5.7 points, suggesting varying conditions in different regions. Home construction activity softened, with housing starts decreasing to 1.366 million from a revised 1.515 million in December, though building permits remained stable. These mixed indicators suggest economic challenges amid consumer caution and regional disparities in manufacturing activity.
The recent movements in economic indicators can affect the exchange rate of USDCAD. Strong Canadian retail performance and a modest rise in inflation suggest a potentially firmer Canadian dollar. In contrast, the mixed U.S. economic data, particularly the decline in consumer sentiment and manufacturing outlook, could weaken the U.S. dollar. This relative economic buoyancy in Canada compared to the U.S. might put upward pressure on the Canadian dollar, causing the USDCAD pair to potentially retrace or stabilize in the near term, subject to other global economic conditions and monetary policies forthcoming. The recent rise in USDCAD by 0.39% reflects these dynamic market adjustments as traders anticipate future economic policy directions on both sides.
From X (Twitter)
Retail sales increased 2.5% to $69.6 billion in December 2024: https://t.co/Mz0Sj8btzh pic.twitter.com/NRemXzKSH3
— Statistics Canada (@StatCan_eng) February 21, 2025
What can we expect from USDCAD for the new week and what happened on Friday?
USDCAD on Friday rose 0.39% to 1.42. Price is below 9-Day EMA while Stochastic is rising. For the week ending 2025-02-21, the pair rose 0.33% or 46.9 pips higher.
Looking ahead, USDCAD looks bullish as the pair ended higher after Friday trading session.
For the new week, our technical outlook is mixed. To see upside interest, we prefer to look at price breakout of week high of 1.42 or at least consolidates above Weekly Pivot level of 1.42. On the downside, we are looking at week low 1.42 or 1.42 (WS1) as immediate support level. USDCAD need to break on either side to indicate a short-term bias. A break above 1.42 would suggest bullish bias after recent positive movement.
For the month of February, USDCAD is down by -1.81% or -262.1 pips lower.
Weekly key levels to watch out:
| R3 | 1.43 |
| R2 | 1.43 |
| R1 | 1.43 |
| Weekly Pivot | 1.42 |
| S1 | 1.42 |
| S2 | 1.41 |
| S3 | 1.41 |
You might also be interested in:
Retail trade, December 2024 Source: Statistics Canada Retail trade, December 2024 Source: Statistics Canada
Minutes of the Federal Open Market Committee, January 28-29, 2025 Source: Federal Reserve New Residential Construction Source: Census Bureau Consumer Price Index, January 2025 Source: Statistics Canada Consumer Price Index, January 2025 Source: Statistics Canada Consumer Price Index, January 2025 Source: Statistics Canada Consumer Price Index, January 2025 Source: Statistics Canada