Usdcad slightly drops amid consolidation and softening US economic data signals

USDCAD Analysis

Performance after Tuesday
Period	Pct	Chg	Momentum
Tuesday	-0.04%	-5.2 Pips
Week to-date	-0.18%	-25 Pips
April	-3.87%	-556.7 Pips

Upcoming key events (London Time)

Wed 01:30 PM USD PCE Price Index, excluding food and energy (12-mth)
Wed 01:30 PM USD GDP annual rate

What happened lately

In the United States, the Job Openings and Labor Turnover Survey (JOLTS) reported a decrease in job openings for March, illustrating a contraction from 7.568 million in February to 7.192 million. This report from the Bureau of Labor Statistics signals a softening labor market, as fewer positions are available, potentially reflecting hiring pulls amidst economic uncertainties. Additionally, the U.S. House Price Index saw a decline in its month-to-month percentage growth, dropping to 0.1% in February from 0.2% in January, based on data from the Federal Housing Finance Agency (FHFA). This suggests a stabilization or decline in the housing market’s growth rate, which could reflect broader economic trends or adjustments in buyer behavior due to economic conditions.

The impact of these U.S. economic data releases on the USDCAD currency pair is particularly noteworthy. The reported decline in job openings, along with the slower growth in the housing market, might indicate softening economic conditions in the United States, leading to less optimism about future economic growth. These reports generally create a cautious sentiment among investors, causing reduced demand for the U.S. dollar as they anticipate potential policy responses from the Federal Reserve. Consequently, the USDCAD reflected this sentiment as highlighted by a slight drop of -0.04% to 1.38255 on Tuesday, indicating a consolidation phase. Market participants are likely to keep a keen eye on upcoming economic data, such as the USD PCE Price Index and GDP annual rate, as these will provide further insight into inflationary trends and economic momentum, influencing currency movements. As economic reports unfold, the balance between U.S. dollar strength against the Canadian dollar will remain a critical focus for traders and investors.

Latest from X (Twitter)

Tweets by Statistics Canada

What can we expect from USDCAD today?

USDCAD on Tuesday dropped -0.04% to 1.38255. Price is below 9-Day EMA while Stochastic is falling.

Updated daily direction for USDCAD looks mixed as the pair is likely to consolidate above 1.37959 (S1).

Looking ahead today, to see upside interest, we prefer to look at price breakout of last daily high of 1.38713 or trades above daily pivot 1.38336. Break above could target R1 at 1.38632. While to the downside, we are looking at 1.37959 (S1) and daily low of 1.38040 as support levels. USDCAD need to break on either side to indicate a short-term bias. A close below 1.38040 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:

#USDCAD Trending on Twitter

[custom-twitter-feeds hashtag=”#USDCAD” num=3 showheader=false]