USDCAD on Friday rose 0.19% to 1.43490. Week ending 2025-03-21 moved lower by -0.14%. What you need to know.

USDCAD Analysis

Performance
Period	Pct	Chg	Momentum
Friday	0.19%	26.6 Pips
Week 2025-03-21	-0.14%	-20 Pips
March	-0.8%	-115 Pips

Upcoming key events for the new week (London Time)

Thu 12:30 PM GDP annual rate
Fri 12:30 PM PCE Price Index, excluding food and energy (12-mth)

What happened over the week

In January, Canada’s retail trade showed a marked decrease, with a -0.6% change down from the revised figure of 2.6% in December 2024, according to Statistics Canada. This decline highlights a slowdown in consumer spending, particularly notable as retail trade excluding automobiles decreased to 0.2% from 2.9% in the previous month. These figures suggest that economic momentum in Canada may be weakening, potentially affecting growth forecasts and policy decisions moving forward.

In the United States, several economic indicators were reported, suggesting a mixed economic outlook. U.S. initial unemployment insurance claims increased to 223,000, a slight rise from previous figures, which implies a modest softening in the labor market. The U.S. Manufacturing Business Outlook Survey by the Philadelphia Fed dropped to 12.5 points from 18.1 points, indicating a weaker-than-expected manufacturing sector. Additionally, the Federal Reserve’s interest rate projections for the first and second year decreased, with the short-term rate dropping to 3.4% from 3.9%, and the second-year projection to 3.1% from 3.4%. However, longer-term projections remained unchanged at 3%. The Federal Funds Rate stayed at 4.5%, unchanged since the last decision, signaling a steady stance amidst a fluctuating economic environment.

The USDCAD currency pair experienced a slight increase of 0.19% on Friday, ending at 1.43490, although it moved lower over the week by -0.14%. The pair has been contained within a three-week trading range between 1.42393 and 1.45430. The deterioration in Canadian retail sales could weaken the Canadian dollar as it suggests potential economic slowing, which may lead the Bank of Canada to maintain or even cut interest rates to stimulate growth. In contrast, the mixed signals from the U.S. economy, including stable interest rates and lower projections, do not provide a strong incentive for a stronger or weaker U.S. dollar. As a result, these dynamics are likely to maintain pressure on the USDCAD, with potential volatility expected around upcoming U.S. economic releases like the GDP annual rate and PCE Price Index.

From X (Twitter)

Retail sales decreased 0.6% to $69.4 billion in January 2025. https://t.co/ZNZGMb5z3l pic.twitter.com/OZMGhA8wKI

— Statistics Canada (@StatCan_eng) March 21, 2025

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

USDCAD on Friday rose 0.19% to 1.43. Price is above 9-Day EMA while Stochastic is rising. For the week ending 2025-03-21, the pair dropped -0.14% or -20 pips lower.

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 bearish, immediate support level is at 1.43 (WS1) with break below could see further selling pressure towards 1.42 (WS2). For potential buyers, as the current momentum is bearish, we prefer to look at firm break of the week high of 1.44 as an important indicator of buying interest. Failure to break the resistance level would continue to echo bearish sentiment. A close below week low of 1.43 would indicate selling pressure.

For the month of March, USDCAD is down by -0.8% or -115 pips lower.

Weekly key levels to watch out:

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