USDCAD Analysis
| Week Ending 2024-09-20 | |||
| Open | High | Low | Close |
| 1.36 | 1.36 | 1.35 | 1.36 |
| Performance | |||||
| Period | Pct | Chg | Momentum | ||
| Friday | 0.05% | 6.4 Pips |  |
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| Week 2024-09-20 | -0.06% | -8.7 Pips |  |
||
| September | 0.59% | 79.9 Pips | |
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Upcoming key events for the new week (London Time)
Thu 01:30 PM Initial Unemployment Insurance Claims 
Thu 01:30 PM GDP annual rate Thu 02:20 PM Federal Reserve Chair Jerome Powell speech Fri 01:30 PM PCE Price Index, excluding food and energy (12-mth)
What happened over the week
In Canada, retail trade for July exhibited a notable improvement, rising to 0.9% compared to the revised June figure of -0.2%, as reported by Statistics Canada. Similarly, retail trade excluding automobile sales saw an increase to 0.4% in July from 0.3% in June. This uptick in retail figures suggests a healthy consumer spending environment in Canada, which could support overall economic growth and potentially lead to stronger currency performance.
In the United States, several key economic indicators revealed mixed signals. The Manufacturing Business Outlook Survey showed a substantial improvement in September, climbing to 1.7 points from -7 points in August, according to the Philadelphia Fed. Initial unemployment insurance claims for the week ending 14 September dropped to 219K from a revised figure of 231K, as noted by the Department of Labor. However, interest rate projections and the Federal Funds Rate both experienced reductions. The Federal Reserve’s interest rate projections fell to 4.4%, down from 5.1%, and the actual interest rate decision lowered the rate to 5% from 5.5%. Meanwhile, the U.S. Census Bureau reported positive movements in the housing sector: building permits in August rose to 1.475 million from a revised 1.406 million in July, and housing starts increased to 1.356 million from a revised 1.237 million in July.
Regarding the USDCAD performance, the currency pair rose slightly by 0.05% to 1.35690 on Friday, although it moved lower by -0.06% over the week ending 20 September 2024. The surge in retail trade in Canada implies a strengthening Canadian economy, which could bolster the CAD. Conversely, the reduced interest rates in the U.S. could weaken the USD, making the CAD relatively stronger. This dynamic will likely continue affecting the USDCAD movement, potentially leading to a stronger CAD against the USD. Upcoming U.S. economic events, such as additional unemployment claims, GDP annual rate, and the Federal Reserve Chair Jerome Powell’s speech, along with the PCE Price Index, excluding food and energy, could further influence the exchange rate dynamics depending on the outcomes of these metrics.
From X (Twitter)
The Consumer Price Index (#CPI) rose 2.0% on a year-over-year basis in August 2024, increasing at the slowest pace since February 2021, and down from a 2.5% gain in July 2024. https://t.co/VGjiE03W8B pic.twitter.com/yhLowzylal
— Statistics Canada (@StatCan_eng) September 17, 2024
What can we expect from USDCAD for the new week and what happened on Friday?
USDCAD on Friday rose 0.05% to 1.36. Price is below 9-Day EMA while Stochastic is falling. For the week ending 2024-09-20, the pair dropped -0.06% or -8.7 pips lower.
Looking ahead, USDCAD looks bullish as the pair ended higher after Friday trading session.
For the new week, our technical outlook is mixed. To see upside interest, we prefer to look at price breakout of week high of 1.36 or at least consolidates above Weekly Pivot level of 1.36. On the downside, we are looking at week low 1.35 or 1.35 (WS1) as immediate support level. USDCAD need to break on either side to indicate a short-term bias. A close below week low of 1.35 would indicate selling pressure.
For the month of September, USDCAD is up by 0.59% or 79.9 pips higher.
Weekly key levels to watch out:
| R3 | 1.37 |
| R2 | 1.37 |
| R1 | 1.36 |
| Weekly Pivot | 1.36 |
| S1 | 1.35 |
| S2 | 1.35 |
| S3 | 1.34 |
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Retail trade, July 2024 Source: Statistics Canada Retail trade, July 2024 Source: Statistics Canada Retail trade, July 2024 Source: Statistics Canada
U.S. International Transactions, 2nd Quarter 2024 Source: Bureau of Economic Analysis Federal Reserve Board and Federal Open Market Committee release economic projections from the September 17-18 FOMC meeting Source: Federal Reserve Federal Reserve issues FOMC statement Source: Federal Reserve New Residential Construction Source: Census Bureau Manufacturing and Trade Inventories and Sales Source: Census Bureau Advance Monthly Sales for Retail and Food Services Source: Census Bureau Small area estimates of employment and unemployment rate for self-contained labour areas, November 2021 to June 2024 Source: Statistics Canada Consumer Price Index, August 2024 Source: Statistics Canada Small area estimates of employment and unemployment rate for self-contained labour areas, November 2021 to June 2024 Source: Statistics Canada Consumer Price Index, August 2024 Source: Statistics Canada Small area estimates of employment and unemployment rate for self-contained labour areas, November 2021 to June 2024 Source: Statistics Canada Consumer Price Index, August 2024 Source: Statistics Canada Small area estimates of employment and unemployment rate for self-contained labour areas, November 2021 to June 2024 Source: Statistics Canada Consumer Price Index, August 2024 Source: Statistics Canada