USDCAD on Friday rose 0.05% to 1.34930. Week ending 2024-08-30 moved lower by -0.11%. End of August dropped -2.28%. What happened.

USDCAD Analysis

Performance
Period	Pct	Chg	Momentum
Friday	0.05%	6.9 Pips
Week 2024-08-30	-0.11%	-15 Pips
August	-2.28%	-315.3 Pips

Upcoming key events for the new week (London Time)

Mon 06:00 AM Labor Day
Mon 06:00 AM Labor Day
Wed 02:45 PM Bank of Canada Policy Interest Rate
Thu 01:30 PM Initial Unemployment Insurance Claims
Fri 01:30 PM Labour Force Net Change in Employment
Fri 01:30 PM Labour Force Unemployment Rate
Fri 01:30 PM Nonfarm Payroll Employment

What happened over the week

In the United States, economic indicators showed mixed signals in August. The Michigan Index of Consumer Sentiment inched up slightly to 67.9 points from 67.8 points in July, indicating a stable consumer outlook (source: University of Michigan). Personal Consumption Expenditures (PCE) Price Index increased to 0.2% in July from 0.1% in June, and consumer spending (PCE) also saw an uptick to 0.5% from 0.3% (source: Bureau of Economic Analysis). Personal income rose to 0.3% in July from 0.2% in June. However, durable goods orders excluding transportation and non-defense capital goods orders excluding aircraft declined in July, signaling weaker investment in certain sectors (source: Census Bureau). Conversely, the U.S. GDP’s annual rate showed improvement, rising to 3% in Q2 from 2.8% in Q1 (source: Bureau of Economic Analysis). Initial unemployment insurance claims slightly decreased to 231,000 from 232,000 (source: Department of Labor), reflecting modest improvement in the labor market.

In Canada, the economic landscape presented varying results. The GDP for June remained flat at 0%, down from 0.2% in May, while the Q2 GDP increased nominally to 0.5% from 0.4% in Q1 (source: Statistics Canada). On a 12-month basis, GDP growth in Q2 was at 2.1%, up from a revised 1.8% in Q1, indicating longer-term economic improvement. However, the Current Account Balance worsened significantly, dropping to -8.48 billion CAD in Q2 from -5.37 billion CAD in Q1 (source: Statistics Canada).

The recent economic data will likely impact the USD/CAD exchange rate. Stronger U.S. GDP growth and steady consumer confidence, coupled with increased personal income and spending, may buoy the U.S. dollar. However, mixed signals such as the drop in durable goods orders could temper the dollar’s strength. On the Canadian front, flat GDP for June and a deteriorating current account balance may weaken the loonie. Given these mixed economic signals from both countries, the USD/CAD exchange rate’s recent movement reflects these complexities. The upcoming high-impact events, particularly the Bank of Canada’s policy interest rate decision and U.S. Nonfarm Payroll Employment data, will be critical in determining the future trajectory of USD/CAD.

From X (Twitter)

Real gross domestic product (GDP) increased 0.5% in the second quarter of 2024, after rising 0.4% in the first quarter. https://t.co/Zn0gguw1SF pic.twitter.com/r6Lmaa6IKe

— Statistics Canada (@StatCan_eng) August 30, 2024

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

USDCAD on Friday rose 0.05% to 1.35. Price is below 9-Day EMA while Stochastic is rising. For the week ending 2024-08-30, the pair dropped -0.11% or -15 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 1.35 or at least consolidates above Weekly Pivot level of 1.35. On the downside, we are looking at week low 1.34 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 1.34 would indicate selling pressure.

For the month of August, USDCAD is down by -2.28% or -315.3 pips lower.

Weekly key levels to watch out:

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