USDCAD Analysis
| Week Ending 2025-02-28 | |||
| Open | High | Low | Close |
| 1.42 | 1.45 | 1.42 | 1.45 |
| Performance | ||||||
| Period | Pct | Chg | Momentum | |||
| Friday | 0.18% | 26.6 Pips |  |
|||
| Week 2025-02-28 | 1.69% | 241 Pips |  February |
-0.41% | -60 Pips |  |
Upcoming key events for the new week (London Time)
Fri 01:30 PM Labour Force Net Change in Employment
Fri 01:30 PM Nonfarm Payroll Employment Fri 01:30 PM Average Hourly Earnings (12-mth)
What happened over the week
The United States economic data from the Bureau of Economic Analysis shows a mixed picture for January. The Personal Consumption Expenditures (PCE) Price Index remained steady at 0.3%, with core PCE, excluding food and energy, showing a slight decline to 2.6% from 2.8% in December. On a 12-month basis, the PCE Price Index saw a small decrease to 2.5% from 2.6%. Personal income rose notably to 0.9%, while consumer spending dropped by 0.2%. Durable goods orders increased by 3.1%, showing improvement from December’s decline. Unemployment claims rose to 242K, and nondefense capital goods orders excluding aircraft, improved significantly to 0.8%. Overall, the data suggests resilience in income growth despite a pullback in consumer spending.
In Canada, Statistics Canada reported that the GDP for the fourth quarter rose to 0.6%, compared to the previous quarter, indicating a strengthening economic condition. The annual GDP growth for Q4 was at a healthy 2.6%. December showed a modest GDP growth of 0.2%, reversing a decline in November. However, Canada’s fourth-quarter current account balance showed a notable deficit widening to -5 billion CAD from an expected -3.23 billion CAD. This rising deficit might raise concerns about external balances, yet overall, the economic expansion appears upbeat in Q4, suggesting resilience amidst a challenging global economic environment.
The USDCAD exchange rate, which moved higher by 0.18% to 1.44640 on Friday, reflects the dynamics apparent in these economic datasets. With the U.S. showing signs of economic resilience, particularly in personal income and durable goods, and Canada recording positive GDP adjustments but worrying current account deficits, the exchange rate movement favoring USD is understandable. Upcoming events will include key employment data releases from both countries such as Labour Force Net Change in Employment for Canada and Nonfarm Payroll Employment along with Average Hourly Earnings in the U.S., which will likely provide further insight and potentially influence the direction of USDCAD in the near term. As of the latest data, USDCAD continues its upward trend, indicating market confidence in U.S. economic performance relative to Canada’s. This trend might sustain if U.S. data remains robust and Canada faces ongoing deficits.
From X (Twitter)
Real gross domestic product (GDP) increased 0.2% in December 2024, partially offsetting the decline recorded in November. https://t.co/fgmBtA6jaw pic.twitter.com/dhM8iH0zrF
— Statistics Canada (@StatCan_eng) February 28, 2025
What can we expect from USDCAD for the new week and what happened on Friday?
USDCAD on Friday rose 0.18% to 1.45. Price is above 9-Day EMA while Stochastic is rising in overbought zone. For the week ending 2025-02-28, the pair rose 1.69% or 241 pips higher.
Looking ahead, USDCAD looks bullish as the pair ended higher after Friday trading session.
For the new week, our technical outlook looks bullish, immediate upside resistance level at 1.46 (WR1) with break above could target 1.47 (WR2). On the downside, we are looking at week low of 1.42 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 February, USDCAD is down by -0.41% or -60 pips lower.
Weekly key levels to watch out:
| R3 | 1.49 |
| R2 | 1.47 |
| R1 | 1.46 |
| Weekly Pivot | 1.44 |
| S1 | 1.43 |
| S2 | 1.41 |
| S3 | 1.40 |
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