USDCAD on Friday dropped -0.09% to 1.37290. Week ending 2024-08-09 moved lower by -1.11%. What you need to know.

USDCAD Analysis

Performance
Period	Pct	Chg	Momentum
Friday	-0.09%	-12.4 Pips
Week 2024-08-09	-1.11%	-154.1 Pips
August	-0.57%	-79.3 Pips

Upcoming key events for the new week (London Time)

Tue 01:30 PM PPI excluding Food and Energy sectors (12-mth)
Wed 01:30 PM CPI Inflation Rate (1-mth)
Wed 01:30 PM CPI Inflation Rate (12-mth)
Thu 01:30 PM Initial Unemployment Insurance Claims
Thu 01:30 PM Monthly Retail Trade (1-mth)

What happened over the week

In Canada, the unemployment rate for July remained steady at 6.4%, showing no change from the previous month of June, as reported by Statistics Canada. However, there was a decline in average hourly wages for a 12-month period, which fell to 5.2% in July from 5.6% in June. This reduction indicates a cooling in wage growth that could suggest potential caution among employers regarding salary increments amid economic uncertainties.

In the United States, the latest data from the Department of Labor reveal that initial unemployment insurance claims for the week ending August 03 decreased to 233,000, down from the revised figure of 250,000. This reduction in claims suggests a strengthening labor market and potentially higher confidence among employers, reflecting improved economic conditions.

The relative economic data from Canada and the United States have significant implications for the USDCAD currency pair. Despite Canada’s steady unemployment rate, the reduction in average hourly wages might indicate slowing economic momentum, which could exert downward pressure on the Canadian dollar. In contrast, the decrease in initial unemployment claims in the U.S. points to a strengthening labor market, which could bolster the U.S. dollar. Consequently, these contrasting economic signals could lead to a stronger USD compared to the CAD. This explains why the USDCAD dropped by 0.09% to 1.37290. The pair’s movement down by 1.11% over the week ending August 09 signifies the relative strength of the U.S. economic recovery compared to Canada’s economic performance.

From X (Twitter)

Employment was little changed in July 2024 (-2,800; -0.0%), while the employment rate fell 0.2 percentage points to 60.9%. The unemployment rate was unchanged at 6.4%.

For more info: https://t.co/Pn04OqBT6r. pic.twitter.com/eqnrDvYVCQ

— Statistics Canada (@StatCan_eng) August 9, 2024

What can we expect from USDCAD for the new week and what happened on Friday?

USDCAD on Friday dropped -0.09% to 1.37. Price is below 9-Day EMA while Stochastic is falling in oversold zone. For the week ending 2024-08-09, the pair dropped -1.11% or -154.1 pips lower.

Looking ahead, USDCAD looks as

For the new week, our technical outlook looks bearish, immediate support level is at 1.37 (WS1) with break below could see further selling pressure towards 1.36 (WS2). For potential buyers, as the current momentum is bearish, we prefer to look at firm break of the week high of 1.39 as an important indicator of buying interest. Failure to break the resistance level would continue to echo bearish sentiment. A close below week low of 1.37 would indicate selling pressure.

For the month of August, USDCAD is down by -0.57% or -79.3 pips lower.

Weekly key levels to watch out:

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