Usdcad rises amid mixed Canadian economic data and upcoming US events

USDCAD Analysis

Performance after Tuesday
Period	Pct	Chg	Momentum
Tuesday	0.29%	41 Pips
Week to-date	0.12%	16.9 Pips
April	-0.89%	-128.2 Pips

Upcoming key events (London Time)

Wed 07:00 PM USD FOMC Meeting Minutes
Thu 01:30 PM USD CPI Inflation Rate (12-mth)

What happened lately

In Canada, the Ivey Purchasing Managers Index (PMI) for March showed a decrease when seasonally adjusted, dropping to 51.3 from 55.3 in February. This suggests a slowdown in business activity since the February period, as a PMI above 50 generally indicates an expansion in economic activity, while a score closer to 50 shows a stagnation. However, in a different reading for March, the PMI appeared to increase to 55.6 from 53.6 in February, signaling contrasting insights into Canada’s economic landscape. This discrepancy indicates that different methodologies or datasets might have been used to ascertain these figures, emphasizing the necessary caution investors should have when interpreting such metrics. Either way, both data points highlight the uncertain economic environment within Canada.

Regarding the USDCAD (U.S. dollar/Canadian dollar) pair, it rose by 0.29% to 1.42580 on Tuesday. This appreciation of the US dollar against the Canadian dollar can be attributed to several factors, including the mixed and slightly weaker economic data from Canada, as indicated by the PMI results. A decrease or uncertainty in Canada’s economic activity can lead to a loss of confidence in the Canadian dollar, prompting investors to favor the US dollar. Furthermore, with high-impact economic events on the horizon, such as the upcoming release of the USD FOMC Meeting Minutes and the USD CPI Inflation Rate announcement, traders may position themselves favorably for potential hawkish policies from the Federal Reserve, driving further USD demand. As these events have historically affected foreign exchange markets significantly, their anticipated outcomes could further influence USDCAD movements, especially if they signal stronger USD implications or diverge from market expectations. As a result, high vigilance is advised as more data unfolds.

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What can we expect from USDCAD today?

USDCAD on Tuesday rose 0.29% to 1.42580. Price is above 9-Day EMA while Stochastic is rising.

Updated daily direction for USDCAD looks bullish as the pair ended higher after Tuesday trading session.

Looking ahead for the day, immediate upside resistance level is R1 at 1.43257 with break above could target R2 at 1.43933 or figure level area. While towards the downside, we are looking at daily low of 1.41390 as an important support. Break below this level could weaken the current bullish momentum. A break above 1.43000 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:

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