Usdcad rise amid market anticipation of fed announcements

USDCAD Analysis

Performance after Wednesday
Period	Pct	Chg	Momentum
Wednesday	0.25%	34.3 Pips
Week to-date	0.27%	38 Pips
May	1.33%	183 Pips

Upcoming key events (London Time)

Thu 01:30 PM USD PPI excluding Food and Energy sectors (12-mth)
Thu 01:30 PM USD Monthly Retail Trade (1-mth)
Thu 01:40 PM USD Federal Reserve Chair Jerome Powell speech

What happened lately

The recent economic data from the United States indicates a slight decrease in the CPI inflation rate for the 12-month period ending in April 2025, falling from 2.4% in March to 2.3%. This downtrend suggests a modest easing in year-on-year inflationary pressures. Additionally, the monthly CPI for April has increased slightly to 0.2% from a negative 0.1% in March, indicating a small rebound in monthly consumer price inflation. The core CPI, which excludes the volatile food and energy sectors, recorded a marginal increase in April 2025, rising to 0.2% from 0.1% in March, reflecting a steady pace in underlying inflation. However, the core inflation rate over the year remained unchanged at 2.8%, implying stability in the core inflation environment.

These inflation developments could influence market perceptions and expectations regarding the Federal Reserve’s monetary policy. With the core inflation rate steady and general inflation showing minimal fluctuation, there could be limited pressure on the Fed to adjust interest rates in the short term. However, upcoming events such as the PPI data release and Jerome Powell’s speech may provide further insights into any potential monetary policy shifts.

Regarding the USDCAD currency pair, the recent modest increase of 0.25% to 1.39701 is likely a reflection of the broader market conditions, with traders positioning themselves in anticipation of potential announcements from the Federal Reserve. The data indicating minor inflationary changes may have tempered any significant strengthening of the USD. However, if upcoming events bring unexpected results, particularly in producer prices and retail trade data, it could prompt adjustments in the pair as market participants reassess the economic outlook and possible interest rate directions. Consequently, the USDCAD exchange rate will be influenced by not only the current inflation data but also market interpretations of the forthcoming high-impact economic indicators and the Fed Chair’s commentary.

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What can we expect from USDCAD today?

USDCAD on Wednesday rose 0.25% to 1.39701. Price is above 9-Day EMA while Stochastic is falling.

Updated daily direction for USDCAD looks mixed as the pair is likely to consolidate above 1.39167 (S1).

Looking ahead today, to see upside interest, we prefer to look at price breakout of last daily high of 1.39860 or trades above daily pivot 1.39514. Break above could target R1 at 1.40047. While to the downside, we are looking at 1.39167 (S1) and daily low of 1.38980 as support levels. USDCAD need to break on either side to indicate a short-term bias. A break above 1.39860 may suggest continuation after recent positive movement.

For the week to-date, take note that USDCAD is bullish as the pair continued to trade higher and is up by 0.27% over the past few days.

Key levels to watch out:

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