- USD/CAD tallied its fifth day in a row of losses of 1.3515.
- US August’s PPI ran hot and rose to 1.7% YoY. Retail Sales came in hot.
- Fed tightening expectations eased somewhat. Yield remains high.
- Jobless Claims from the second week in September came in lower than expected.
On Thursday’s session, the USD/CAD continued its downward path, failing nearly to 1.3510, seeing 0.30% losses. On the CAD’s side, its strength may be explained by higher Oil prices as Canada is a leading exporter, while the USD measure by the DXY index rose to fresh highs around 105.20 after the release of mid-tier data. In line with that, the downside may be limited for the pair.
On the data front, the Greenback gained momentum after it was reported that Retail Sales rose 0.6% MoM in August, much better than the 0.2% anticipated and higher than the previous 0.6%. In addition, the Producer Price Index (PPI) jumped from 0.7% MoM to 1.6% YoY in August, also beating expectations. Moreover, Jobless Claims for the second week of September accelerated but below the expectations at 220,000, higher than the previous weekly reading of 217,000 but below the expected 225,000.
As a reaction, US Treasury yields advanced with the news, with the 2-year note offering nearly 5% and boosting demand for the American dollar, whose DXY index continues to trade at highs since early March. On the expectations front, the CME FedWatch tool suggests that the odds of one last hike in 2023 by the Federal Reserve (Fed) declined to nearly 35% from 40% in the previous sessions. Attention now turns to next week’s decision, where markets have already priced in a pause, but the statement and Chair Powell’s presser will be closely monitored.
USD/CAD Levels to watch
The short-term view for USD/CAD suggests a bearish outlook based on the daily chart analysis. The Relative Strength Index (RSI) is positioned below its midline and displays a southward slope, while the Moving Average Convergence Divergence (MACD) exhibits red bars, signalling an increasing bearish momentum. On the other hand, the pair is below the 20-day Simple Moving Average (SMA) but above the 100 and 200-day SMAs, pointing towards the prevailing strength of the bulls in the larger context.
Support levels: 1.3500, 1.3490, 1.3463 (200-day SMA).
Resistance levels: 1.3576 (20-day SMA), 1.3600, 1.3630.
USD/CAD Daily Chart
-638303042577466230.png)
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD retreats to 1.0700 area following post-PCE jump
After spiking to a daily high of 1.0720 with the immediate reaction to US PCE inflation data, EUR/USD lost its traction and declined to the 1.0700 area. Investors remain cautious ahead of this weekend's French election and make it difficult for the Euro to gather strength.
GBP/USD stays below 1.2650 after US inflation data
GBP/USD struggles to preserve its bullish momentum and trades below 1.2650 in the American session on Friday. Earlier in the day, the data from the US showed that the annual core PCE inflation declined to 2.6% in May, limiting the USD's upside and helping the pair hold its ground.
Gold keeps its daily gains near $2,330 following US PCE data
Gold prices maintain their constructive bias around $2,330 after US inflation readings gauged by the PCE matched consensus in May and US yields advance slightly across the curve.
BTC struggles around the $62,000 level
Bitcoin price faces pullback resistance at the lower band of the descending wedge around $62,000. Ethereum price finds support at $3,288, the 61.8% Fibonacci retracement level. Ripple price faces resistance at $0.500, its daily resistance level.
French Elections Preview: Euro to suffer after the calm, as specter of extremists, uncertainty rise Premium
The first round of French parliamentary elections is set to trigger high uncertainty. Soothing messages from the far right and far left leave the Euro vulnerable to falls. Calm may return only after the second round of voting on July 7.