USDCAD Analysis
| Performance after Thursday | |||||
| Period | Pct | Chg | Momentum | ||
| Thursday | -0.18% | -25.1 Pips |  |
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| Week to-date | 0.5% | 69 Pips |  |
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| May | 0.1% | 14 Pips | |
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Upcoming key events (London Time)
Fri 01:30 PM CAD GDP (12-mth)
Fri 01:30 PM USD PCE Price Index, excluding food and energy (12-mth)
What happened lately
In the United States, several economic indicators have shown mixed results for early 2025. Pending Home Sales decreased significantly by 6.3% in April compared to a revised growth of 6.1% in March. This decline signals a potential cooling in the housing market. The labor market also faced challenges as initial unemployment insurance claims increased to 240,000 in the week ending 24 May, up from 226,000 previously, indicating potential softness in employment trends. The GDP annual rate for Q1 2025, however, showed slight improvement, reaching a flash estimate of -0.2% compared to -0.3% in the previous quarter. Core inflation excluding food and energy prices, as indicated by the PCE, slightly decreased to 3.4% after being 3.5% in the fourth quarter of 2024. The PCE Price Index remained stable with a quarterly estimate of 3.6%, and the GDP Price Index stayed unchanged at 3.7% from the last quarter’s report, demonstrating consistent inflation expectations.
In Canada, the Q1 2025 current account balance significantly improved, narrowing to -2.13 billion CAD from a revised -3.56 billion CAD in the previous quarter. This better-than-expected outcome suggests that Canada is making headway in stabilizing its trade and financial flows. The enhancement in the current account could have positive implications for the Canadian economy, showing signs of resilience despite global economic uncertainties.
The recent data indicates a downward trend for the USDCAD currency pair, decreasing by 0.18% to 1.38070, with the pair in a state of consolidation. The weakening of the pair could be linked to the slightly more favorable economic outlook in Canada, as evidenced by the improved current account balance, juxtaposed with mixed signals from the U.S. market, where indications of economic growth are accompanied by unemployment disturbances and a subdued housing market. Market participants may also be positioning themselves ahead of upcoming high-impact announcements, such as the Canadian GDP and the U.S. PCE Price Index releases, which could swing sentiment and further influence the USDCAD pair’s trajectory in the short term.
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What can we expect from USDCAD today?
USDCAD on Thursday dropped -0.18% to 1.38070. Price is below 9-Day EMA while Stochastic is rising.
Updated daily direction for USDCAD looks mixed as the pair is likely to consolidate above 1.37708 (S1).
Looking ahead today, to see upside interest, we prefer to look at price breakout of last daily high of 1.38616 or trades above daily pivot 1.38162. Break above could target R1 at 1.38524. While to the downside, we are looking at 1.37708 (S1) and daily low of 1.37800 as support levels. USDCAD need to break on either side to indicate a short-term bias. A close below 1.37800 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:
| R3 | 1.3934 |
| R2 | 1.38978 |
| R1 | 1.38524 |
| Daily Pivot | 1.38162 |
| S1 | 1.37708 |
| S2 | 1.37346 |
| S3 | 1.36892 |
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