USDCAD Analysis
| Performance after Thursday | |||||
| Period | Pct | Chg | Momentum | ||
| Thursday | 0.18% | 25.3 Pips |  |
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| Week to-date | 0.39% | 53.9 Pips | |
||
| October | 2.41% | 326.3 Pips |  |
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Upcoming key events (London Time)
No major events for the day.
What happened lately
In the United States, new-home sales showed a recovery in September, rising by 4.1% following a decline in August. Initially reported as a 4.7% drop, the August figures were revised to a decrease of only 2.3%. This growth in the housing market indicates a strengthening of consumer confidence and economic activity. Additionally, the job market also showed improvement, with initial unemployment insurance claims falling to 227,000 for the week ending 19 October, down from a revised 242,000 in the previous period, as reported by the Department of Labor. This decline in unemployment claims suggests a robust job market, potentially bolstering household spending and economic stability.
In Canada, the Bank of Canada recently adjusted its policy interest rate, reducing it from 4.25% to 3.75%. This decision aims to stimulate economic activity by making borrowing more affordable, thereby encouraging investment and spending. The lowering of the interest rate reflects concerns about economic slowdown and represents a cautious approach to fostering economic growth.
The news from both the United States and Canada has implications for the USDCAD currency pair. The rise in US home sales and improvement in the labor market reflect strong economic fundamentals, potentially strengthening the US dollar. Conversely, the Canadian interest rate cut by the Bank of Canada could lead to a weaker Canadian dollar due to reduced returns on investments, making the currency less attractive to investors. The combination of these factors may lead to a rise in USDCAD, as observed by its 0.18% increase to 1.38535. Traders may view the disparity in economic indicators between the two countries as a signal to prefer the US dollar over the Canadian dollar, influencing the currency’s value accordingly.
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What can we expect from USDCAD today?
USDCAD on Thursday rose 0.18% to 1.38535. Price is above 9-Day EMA while Stochastic is falling.
Updated daily direction for USDCAD looks bullish as the pair ended higher after Thursday trading session.
Looking ahead for the day, immediate upside resistance level is R1 at 1.38787 with break above could target R2 at 1.3904 or figure level area. While towards the downside, we are looking at daily low of 1.38080 as an important support. Break below this level could weaken the current bullish momentum. A break above 1.38686 may suggest continuation after recent positive movement.
For the week to-date, take note that USDCAD is bullish as the pair continued to trade higher and is up by 0.39% over the past few days.
Key levels to watch out:
| R3 | 1.39393 |
| R2 | 1.3904 |
| R1 | 1.38787 |
| Daily Pivot | 1.38434 |
| S1 | 1.38181 |
| S2 | 1.37828 |
| S3 | 1.37575 |
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