Usd/cad rises 0.78% amid mixed us economic data and anticipation of upcoming central bank actions

USDCAD Analysis

Performance after Tuesday
Period	Pct	Chg	Momentum
Tuesday	0.78%	106 Pips
Week to-date	0.74%	101 Pips
June	-0.4%	-55 Pips

Upcoming key events (London Time)

Wed 04:30 PM CAD Bank of Canada’s Governor Tiff Macklem speech
Wed 07:00 PM USD Fed Interest Rate Decision (Federal Funds Rate)
Wed 07:00 PM USD FOMC Economic Projections
Wed 07:00 PM USD Interest Rate Projections

What happened lately

In the United States, economic data for May 2025 presents a mixed scenario. Industrial production decreased by 0.2%, highlighting some contraction in production activities compared to April, when the rate was steady at 0%. Retail-wise, consumer spending experiences a downturn as monthly retail trade fell significantly by 0.9%, revised down from the initial figure of 0.1%. This indicates a notable weakening in consumer spending, which is a key driver of the U.S. economy. Noteworthy though is the Retail Trade Control Group, which saw an increase to 0.4% in May from the revised previous standing of -0.1%, suggesting some underlying strength in essential spending categories. Retail trade excluding automobiles, however, also decreased to -0.3% from 0.1%, showing that even without volatile categories like automobiles, retail figures were struggling. Additionally, manufacturing activity in New York saw a decline as the Empire State Manufacturing Index dropped to -16 points, marking a further decrease from the -9.2 points noted in May.

Regarding the USDCAD, the economic data has had implications on currency movements. With the U.S. experiencing a drop in industrial production and weakening retail trade figures, these signs of economic slowdown contribute to a bearish sentiment towards the U.S. dollar. On the other hand, upcoming high-impact events such as the Federal Reserve’s interest rate decisions and economic projections are anticipated and could cause market volatility. With these economic indicators and projections, the market might have already priced in anticipatory movements, leading to the USDCAD rising by 0.78%. The increased demand for the Canadian dollar relative to the U.S. dollar might also be attributed to expectations surrounding the Bank of Canada’s governing strategies, with Governor Tiff Macklem’s upcoming speech being pivotal. Traders may position themselves cautiously ahead of these announcements, which could lead to fluctuations in the USDCAD pair around these events, as they provide further direction on monetary policies affecting both currencies.

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What can we expect from USDCAD today?

USDCAD on Tuesday rose 0.78% to 1.36740. 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 1.37275 with break above could target R2 at 1.37811 or figure level area. While towards the downside, we are looking at daily low of 1.35520 as an important support. Break below this level could weaken the current bullish momentum. A break above 1.36933 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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