USDCAD Analysis
| Week Ending 2024-10-18 | |||
| Open | High | Low | Close |
| 1.38 | 1.38 | 1.37 | 1.38 |
| Performance | |||||
| Period | Pct | Chg | Momentum | ||
| Friday | 0.01% | 1.3 Pips |  |
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| Week 2024-10-18 | 0.12% | 16.8 Pips | |
||
| October | 2% | 270.8 Pips |  |
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Upcoming key events for the new week (London Time)
Wed 02:45 PM Bank of Canada Policy Interest Rate
Thu 01:30 PM Initial Unemployment Insurance Claims
What happened over the week
In the United States, recent economic data presented a mixed picture. According to the Census Bureau, U.S. Building Permits for September fell to 1.428 million from a revised 1.47 million in August, while Housing Starts also declined slightly to 1.354 million from an adjusted 1.361 million. Despite these decreases in the housing sector, the Manufacturing Business Outlook Survey showed an improvement, climbing to 10.3 points in October from 1.7 points in September as reported by the Philadelphia Fed. Retail sales showed growth as well, with a 0.4% increase in September, up from 0.1% in August, as indicated by the Census Bureau. Additionally, the labor market showed signs of resilience, with initial unemployment claims dropping significantly to 241,000 from 258,000 in the week ending October 12, according to the Department of Labor.
In Canada, inflation data provided a glimpse into the economic conditions. The Bank of Canada reported an increase in the Core Inflation CPI to 1.6% in September from 1.5% in August. However, the overall CPI Inflation Rate for a one-month period decreased to -0.4% from -0.2% in the previous month, as per Statistics Canada. Furthermore, the core CPI inflation rate on a month-to-month basis climbed to 0% from -0.1% in August, while the 12-month CPI inflation rate decelerated to 1.6% from 2%. These figures suggest mixed inflationary pressures, with core inflation rising slightly but overall and annual inflation rates showing a decline.
The USDCAD pair saw a slight increase of 0.01% to 1.37980 on Friday, with a weekly rise of 0.12% ending October 18. The increase in the U.S. Manufacturing Outlook may provide support to the U.S. dollar, leading to a higher USDCAD rate. However, housing data weakness and moderate retail growth could temper stronger dollar movements. Concurrently, Canada’s stable core inflation and declining overall inflation may not significantly influence CAD strength unless upcoming events, such as the Bank of Canada’s Policy Interest Rate decision, introduce new monetary policy perspectives. With these mixed economic signals, short-term movements in USDCAD could remain relatively stable barring substantial data surprises from either the U.S. or Canada.
From X (Twitter)
The Consumer Price Index (#CPI) rose 1.6% on a year-over-year basis in September 2024, down from a 2.0% gain in August. This was the smallest yearly increase since February 2021 (+1.1%). https://t.co/E9wd0EwIcW pic.twitter.com/Fq0DjZZT3F
— Statistics Canada (@StatCan_eng) October 15, 2024
What can we expect from USDCAD for the new week and what happened on Friday?
USDCAD on Friday rose 0.01% to 1.38. Price is above 9-Day EMA while Stochastic is falling. For the week ending 2024-10-18, the pair rose 0.12% or 16.8 pips higher.
Looking ahead, USDCAD looks mixed as the pair is likely to consolidate above week low of 1.37.
For the new week, our technical outlook is mixed. To see upside interest, we prefer to look at price breakout of week high of 1.38 or at least consolidates above Weekly Pivot level of 1.38. On the downside, we are looking at week low 1.37 or 1.38 (WS1) as immediate support level. USDCAD need to break on either side to indicate a short-term bias. A break above 1.38 would suggest bullish bias after recent positive movement.
For the month of October, USDCAD is up by 2% or 270.8 pips higher.
Weekly key levels to watch out:
| R3 | 1.39 |
| R2 | 1.39 |
| R1 | 1.38 |
| Weekly Pivot | 1.38 |
| S1 | 1.38 |
| S2 | 1.37 |
| S3 | 1.37 |
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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 Minutes of the Board’s discount rate meetings on September 9 and 18, 2024 Source: Federal Reserve
Consumer Price Index, September 2024 Source: Statistics Canada Consumer Price Index, September 2024 Source: Statistics Canada Consumer Price Index, September 2024 Source: Statistics Canada Consumer Price Index, September 2024 Source: Statistics Canada