Usd/cad consolidates at 1.44300 amid contrasting economic updates from us and canada

USDCAD Analysis

Performance after Wednesday
Period	Pct	Chg	Momentum
Wednesday	0%	-0.2 Pips
Week to-date	0.44%	62.7 Pips
March	-0.24%	-34 Pips

Upcoming key events (London Time)

Thu 12:30 PM USD PPI excluding Food and Energy sectors (12-mth)
Fri 02:00 PM USD Index of Consumer Sentiment

What happened lately

In the United States, February witnessed several significant economic changes. The Monthly Treasury Budget Statement expanded its deficit to -$307 billion from January’s -$129 billion. Meanwhile, inflationary pressures showed signs of easing. The Consumer Price Index (CPI) Inflation Rate for the 12-month period decreased to 2.8% in February from 3% in January, while the monthly CPI inflation rate for February also slowed to 0.2% from 0.5%. Excluding food and energy sectors, the CPI inflation rate over a 12-month period fell to 3.1% from January’s 3.3%. This inflationary relief coincides with an increase in job openings. In January, the Job Openings and Labor Turnover Survey (JOLTS) reflected a rise to 7.74 million job openings, moving up from December’s revised figure of 7.508 million, signaling a resilient labor market amidst a tempered inflation environment.

In Canada, a shift in monetary policy stance was observed with the Bank of Canada reducing its Policy Interest Rate to 2.75% from the previous 3%. This rate cut is likely a strategic response to stimulate economic activity amidst global financial uncertainties and potential slowdowns.

The USDCAD currency pair experienced consolidation, maintaining its level at 1.44300. The economic data from the U.S. suggest a possible continuation of consolidation, with no immediate surge of volatility expected in the short term. The reduction in U.S. inflation and the drop in Canada’s interest rate may lead to a mixed impact on the USDCAD pair. However, with upcoming data releases, specifically the USD PPI excluding food and energy sectors and the USD Index of Consumer Sentiment, traders might anticipate shifts based on these economic indicators. The stabilization of inflation in the U.S. aligns with cautious optimism around a strengthening U.S. job market. In contrast, Canada’s reduced interest rate could provide a narrower support for the Canadian dollar, possibly moderating the trajectory of the USDCAD pair in the near future.

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What can we expect from USDCAD today?

USDCAD on Wednesday dropped 0% to 1.44300. Price is above 9-Day EMA while Stochastic is rising.

Updated daily direction for USDCAD looks mixed as the pair is likely to consolidate above 1.44203 (S1).

Looking ahead today, to see upside interest, we prefer to look at price breakout of last daily high of 1.44351 or trades above daily pivot 1.44277. Break above could target R1 at 1.44374. While to the downside, we are looking at 1.44203 (S1) and daily low of 1.44180 as support levels. USDCAD need to break on either side to indicate a short-term bias. A close below 1.44180 would indicate selling pressure.

For the week to-date, take note that USDCAD is mixed as compared to the prior week.

Key levels to watch out:

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