Us dollar to Canadian dollar exchange rate falls as US economic data presents mixed signals

USDCAD Analysis

Performance after Thursday
Period	Pct	Chg	Momentum
Thursday	-0.56%	-76.5 Pips
Week to-date	-0.67%	-92 Pips
June	-0.72%	-99 Pips

Upcoming key events (London Time)

Fri 01:30 PM USD PCE Price Index, excluding food and energy (12-mth)
Fri 09:30 PM USD Bank Stress Test Results

What happened lately

In the United States, there has been a notable shift in several economic indicators for May and the first quarter of 2025. Pending home sales in May increased by 1.8%, recovering from a substantial decline of 6.3% in April. The labor market showed slight improvement, with initial unemployment insurance claims dropping to 236,000 in the week ending June 21, down from a revised figure of 246,000. Durable goods orders excluding transportation rose by 0.5% in May, up from 0.2% in April, while new orders surged by 16.4%, bouncing back from an April decline of 6.3%. Orders for nondefense capital goods, excluding aircraft, saw an increase of 1.7% after a revised drop of 1.5% the previous month, which suggests positive momentum in business investment. However, the GDP for Q1 showed a decline, registering at an annual rate of -0.5%, down from -0.2% in the fourth quarter of the prior year. The PCE Price Index rose slightly to 3.7% in Q1, indicating persistent inflationary pressures, with new-home sales registering a significant decline of 13.7% in May, a sharp contrast to the 10.9% increase in April.

The recent economic data for the U.S. presents a mixed picture which might influence the USDCAD exchange rate. On one hand, positive movements in home sales, durable goods orders, and unemployment claims suggest a recovering economy. On the other hand, the contraction in GDP and the decline in new-home sales alongside elevated inflationary pressures point to underlying challenges. The composite effect of these indicators generally exerts appreciation pressures on the U.S. dollar, contributing to the observed drop in USDCAD. However, given the complexity and countervailing forces present within the data, it would necessitate a cautious and measured response by investors. Anticipation surrounding the upcoming U.S. PCE Price Index release and the stress test results from the banks may further influence the exchange rate, as market participants seek clarity on the economic trajectory and potential Federal Reserve actions.

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What can we expect from USDCAD today?

USDCAD on Thursday dropped -0.56% to 1.36439. Price is below 9-Day EMA while Stochastic is falling.

Updated daily direction for USDCAD looks bearish as the pair posted lower in Thursday trading session.

Looking ahead for the day, immediate support level is at S1 1.35964 with break below could see further selling pressure towards S2 at 1.3549. To the upside, with the current momentum bearish, we prefer to look at breakout of the recent daily high of 1.37245 as a potential indicator of buying interest. Failure to break the resistance level would continue to echo bearish sentiment. A close below 1.36130 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:

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