Usd/Cad edges slightly higher amid mixed U.S. economic data

USDCAD Analysis

Performance after Wednesday
Period	Pct	Chg	Momentum
Wednesday	0.09%	12.8 Pips
Week to-date	0.8%	109 Pips
June	-0.34%	-47 Pips

Upcoming key events (London Time)

No major events for the day.

What happened lately

In the United States, recent economic data reveals fluctuations in various sectors. The Federal Reserve’s interest rate projections for the second year increased to 3.4%, up from 3.1%, while the first-year projection marginally rose to 3.6%, slightly below the forecast, from 3.4%. However, the projection for the subsequent year remained steady at 3.9%. The Federal Funds Rate was kept unchanged at 4.5%. Labor market data showed some improvement; initial unemployment insurance claims dropped to 245K, from an upwardly revised 250K. On the other hand, construction sector data reflected a slowdown with building permits decreasing to 1.393 million in May from 1.422 million in April, along with housing starts falling to 1.256 million from a previously adjusted 1.392 million. Industrial production dipped to -0.2% in May, marking a decline from April’s 0% growth. Retail trade figures were underwhelming, with the monthly retail trade decreasing by 0.9% in May from -0.1% previously, and excluding automobiles, retail sales dropped to -0.3% from a slight positive in April. Nonetheless, the retail trade control group showed improvement, increasing to 0.4% from a revised -0.1% in April. Overall, these indicators suggest a mixed economic performance with signs of weakening consumer spending contrasted against labor market stability.

The USDCAD currency pair rose by 0.09% to 1.36868 amidst the backdrop of the varied economic data released from the U.S. While no major catalysts were present for the day, the data hints at a cautious economic environment that could contribute to shifts in currency valuations. Typically, weaker economic indicators, like decreased retail sales and industrial output, could pressure the USD negatively. However, the unchanged interest rate and positive shifts in unemployment claims provide some support for the U.S. dollar. Considering the economic indicators and the absence of significant upcoming events, the USDCAD may experience continued consolidation as traders await further clarity on economic direction or potential policy changes.

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What can we expect from USDCAD today?

USDCAD on Wednesday rose 0.09% to 1.36868. Price is above 9-Day EMA while Stochastic is rising.

Updated daily direction for USDCAD looks mixed as the pair is likely to consolidate above 1.36435 (S1).

Looking ahead today, to see upside interest, we prefer to look at price breakout of last daily high of 1.37032 or trades above daily pivot 1.36733. Break above could target R1 at 1.37167. While to the downside, we are looking at 1.36435 (S1) and daily low of 1.36300 as support levels. USDCAD need to break on either side to indicate a short-term bias. A break above 1.37032 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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