- USD/CAD posted its fifth consecutive day of losses and settled at 1.3515.
- The August PPI in the US rose 1.7% year-on-year. Retail sales rose sharply.
- Fed tightening expectations were lowered slightly. Yields remain high.
- Jobless claims for the second week of September were lower than expected.
In Thursday’s session, USD/CAD continued its bearish path and approached 1.3510, with losses of 0.30%. On the CAD side, its strength can be explained by the rise in oil prices, since Canada is one of the main exporters, while the USD measured by the DXY index reached all-time highs around 105.20 after the publication of data medium level Therefore, the pair’s decline could be limited.
In terms of data, the Dollar gained momentum after it was reported that retail sales rose 0.6% month-on-month in August, much better than the 0.2% expected and higher than the previous 0.6%. Furthermore, the Producer Price Index (PPI) rose from 0.7% month-on-month to 1.6% year-on-year in August, also exceeding expectations. Elsewhere, jobless claims for the second week of September accelerated, although below expectations, standing at 220,000, above the previous weekly reading of 217,000, but below the expected 225,000.
In reaction, US Treasury yields advanced on the news, with the 2-year note offering nearly 5% and boosting demand for the US dollar, with the US Dollar Index still trading at highs since early March. Regarding expectations, CME’s FedWatch tool suggests that the odds of a final hike in 2023 by the Federal Reserve (Fed) decreased to almost 35% from 40% in previous sessions. Attention now turns to next week’s decision, in which markets have already priced in a pause, but Chairman Powell’s statement and press conference will be closely monitored.
USD/CAD levels to watch
The short-term view for USD/CAD suggests a bearish outlook based on daily chart analysis. The Relative Strength Index (RSI) is positioned below its midline and is showing a southerly slope, while the Moving Average Divergence (MACD) is exhibiting red bars, signaling growing bearish momentum. On the other hand, the pair is below the 20-day SMA, but above the 100-day and 200-day SMA, pointing to prevailing bullish strength in the broader 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
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Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
