USDCAD Analysis
| Performance after Tuesday | |||||
| Period | Pct | Chg | Momentum | ||
| Tuesday | -0.11% | -15.2 Pips |  |
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| Week to-date | -0.06% | -8 Pips |  |
||
| June | -0.11% | -15 Pips | |
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Upcoming key events (London Time)
Wed 03:00 PM USD Federal Reserve Chair Jerome Powell testifies Thu 01:30 PM USD GDP annual rate
What happened lately
In the United States, the House Price Index for April 2025 experienced a decline, decreasing to -0.4% from the previous -0.1% in March. This indicates a slowing down in the housing market momentum and could reflect potential cooling in economic activity, affecting both investments and consumer spending related to housing. A decline in house prices might diminish household wealth, affecting overall economic confidence and consumer behaviors.
In Canada, the economic data for May 2025 shows a mixed picture regarding inflation indicators. The monthly Consumer Price Index (CPI) inflation rate rose to 0.6% from a previously negative -0.1% in April, suggesting an uptick in price levels and potentially increasing cost pressures on consumers. The Bank of Canada’s Core CPI Inflation Rate also marked a slight increase to 0.6% from 0.5% in April, pointing to persistent underlying inflationary pressures. However, the 12-month CPI inflation rate remained steady at 1.7%, showing no change since April. Furthermore, the Bank of Canada Core Inflation CPI stayed unchanged at 2.5%, indicating a consistent level of underlying inflation.
The recent movements in USDCAD indicate a slight decrease by -0.11% to 1.37140. The U.S. housing market slowdown, as reflected by the decrease in the House Price Index, could exert downward pressure on the U.S. dollar (USD) by potentially signaling a softening economy. Concurrently, the rise in Canadian inflation rates suggests economic resilience, which could strengthen the Canadian dollar (CAD) relative to the USD. However, future movement in USDCAD will be heavily influenced by upcoming significant events, including the Federal Reserve Chair Jerome Powell’s testimony and the U.S. GDP annual rate announcement. These events may provide hints on future monetary policy and economic growth expectations in the U.S., thus impacting forex markets and USDCAD’s trajectory. Overall, while the current data seems to favor the CAD slightly, any indications of strong economic outlook from the U.S. events could reverse this trend, strengthening the USD against the CAD.
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What can we expect from USDCAD today?
USDCAD on Tuesday dropped -0.11% to 1.37140. Price is above 9-Day EMA while Stochastic is falling.
Updated daily direction for USDCAD looks bearish as the pair posted lower in Tuesday trading session.
Looking ahead for the day, immediate support level is at S1 1.36793 with break below could see further selling pressure towards S2 at 1.36447. To the upside, with the current momentum bearish, we prefer to look at breakout of the recent daily high of 1.37380 as a potential indicator of buying interest. Failure to break the resistance level would continue to echo bearish sentiment. A close below 1.36740 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 | 1.38073 |
| R2 | 1.37727 |
| R1 | 1.37433 |
| Daily Pivot | 1.37087 |
| S1 | 1.36793 |
| S2 | 1.36447 |
| S3 | 1.36153 |
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