- 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 struggles to hold above 1.0400 as mood sours
EUR/USD stays on the back foot and trades slightly below 1.0400 following the earlier recovery attempt. In the absence of high-tier data releases, the negative shift seen in risk mood helps the US Dollar gather strength and forces the pair to stretch lower.
GBP/USD declines toward 1.2500 on renewed USD strength
GBP/USD loses its traction and declines to the 1.2500 area in the second half of the day on Monday. The US Dollar (USD) benefits from safe-haven flows and weighs on the pair as investors await US Consumer Confidence data for December.
Gold drops below $2,620 as US bond yields edge higher
After starting the week in a quiet manner, Gold comes under bearish pressure and retreats below $2,620. The benchmark 10-year US Treasury bond yield stays in positive territory above 4.5%, making it difficult for XAU/USD gain traction.
Bitcoin fails to recover as Metaplanet buys the dip
Bitcoin hovers around $95,000 on Monday after losing the progress made during Friday’s relief rally. The largest cryptocurrency hit a new all-time high at $108,353 on Tuesday but this was followed by a steep correction after the US Fed signaled fewer interest-rate cuts than previously anticipated for 2025.
Bank of England stays on hold, but a dovish front is building
Bank of England rates were maintained at 4.75% today, in line with expectations. However, the 6-3 vote split sent a moderately dovish signal to markets, prompting some dovish repricing and a weaker pound. We remain more dovish than market pricing for 2025.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.