USDCAD Analysis
| Performance after Thursday | |||||
| Period | Pct | Chg | Momentum | ||
| Thursday | 0.08% | 10.7 Pips |  |
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| Week to-date | 0.82% | 112 Pips | |
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| June | -0.32% | -44 Pips |  |
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Upcoming key events (London Time)
No major events for the day.
What happened lately
In the United States, the Federal Reserve has updated its interest rate projections. For the second year, interest rates increased to 3.4%, up from the previous 3.1%. The first year’s projection was slightly below forecast, yet still rose to 3.6% compared to the earlier rate of 3.4%. There was no change in the interest rate projections for the remaining term as it remained steady at 3.9%. The Federal Reserve’s interest rate decision for the Federal Funds Rate stayed at 4.5%, indicating a stable policy despite these adjustments in projections. The labor market news was positive, with initial unemployment claims dropping to 245,000, a slight improvement from the revised 250,000, signaling a slightly tighter labor market. The housing sector showed some signs of cooling off, with building permits and housing starts both seeing declines in May 2025. Building permits fell to 1.393 million from a revised figure of 1.422 million in April, while housing starts decreased to 1.256 million from an adjusted April figure of 1.392 million. These indicators suggest a potential slowdown in the housing market.
The USDCAD exchange rate experienced a slight increase of 0.08%, reaching 1.36975, as the pair remains in a period of consolidation. The increase in U.S. interest rate projections could lead to a stronger U.S. dollar, driven by the anticipation of higher returns on assets denominated in USD. This can make the Canadian dollar less attractive by comparison. However, the unchanged Federal Funds Rate suggests that there is no immediate monetary policy action from the Federal Reserve, potentially stabilizing expectations. Meanwhile, the slowing housing market and improved unemployment claims might influence economic outlooks, as they point towards mixed economic momentum in the U.S. All considered, these factors, along with the absence of major upcoming events, may contribute to the ongoing consolidation of the USDCAD pair in the short term.
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What can we expect from USDCAD today?
USDCAD on Thursday rose 0.08% to 1.36975. 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 1.36735 (S1).
Looking ahead today, to see upside interest, we prefer to look at price breakout of last daily high of 1.37464 or trades above daily pivot 1.371. Break above could target R1 at 1.37339. While to the downside, we are looking at 1.36735 (S1) and daily low of 1.36860 as support levels. USDCAD need to break on either side to indicate a short-term bias. A break above 1.37464 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:
| R3 | 1.37943 |
| R2 | 1.37704 |
| R1 | 1.37339 |
| Daily Pivot | 1.371 |
| S1 | 1.36735 |
| S2 | 1.36496 |
| S3 | 1.36131 |
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