USDCAD rises slightly on mixed US economic data and anticipation of Federal Reserve events

USDCAD Analysis

Performance after Tuesday
Period	Pct	Chg	Momentum
Tuesday	0.02%	2.7 Pips
Week to-date	0.1%	13.3 Pips
September	0.76%	101.9 Pips

Upcoming key events (London Time)

Wed 07:00 PM USD Fed Interest Rate Decision (Federal Funds Rate)
Wed 07:00 PM USD Interest Rate Projections

What happened lately

In the United States, Industrial Production experienced a significant uptick in August, climbing to 0.8% after registering a contraction of -0.6% in July. This suggests a solid rebound in production activities, a positive signal for the manufacturing sector. However, consumer spending indicators present a mixed picture. According to the Census Bureau, the Retail Trade Control Group, which excludes volatile items and is considered a good measure of underlying retail activity, declined to 0.3% in August from a revised 0.4% in July. Retail Trade excluding Automobiles also fell, dipping to 0.1% from 0.4% in the previous month. These figures indicate softer consumer demand, a potential concern for overall economic growth.

The recent economic data had a modest impact on the USDCAD exchange rate. On Tuesday, USDCAD rose slightly by 0.02% to 1.35910. The mixed economic reports contributed to this mild appreciation of the USD against the CAD. The significant rise in Industrial Production may have instilled some confidence in the strength of the U.S. economy, despite the lukewarm retail sales figures. Investors are also likely positioning themselves ahead of the upcoming Federal Reserve events on Wednesday, which include the Fed Interest Rate Decision and Interest Rate Projections. Given these high-impact events, market participants are treading carefully, reflecting in the tempered movement of USDCAD.

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What can we expect from USDCAD today?

USDCAD on Tuesday rose 0.02% to 1.35910. 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 1.36136 with break above could target R2 at 1.36362 or figure level area. While towards the downside, we are looking at daily low of 1.35750 as an important support. Break below this level could weaken the current bullish momentum. A break above 1.36169 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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