USDCAD Bounces Off Support After Lower Wholesale Trade
Earlier this month, USDCAD rose above the triangle as the Bank of Canada (BOC) turned dovish while the Federal Reserve (FED) remained hawkish. However, it has since retraced 170 pips, dropping to 1.3622 yesterday where sellers encountered the 100 daily SMA (green).
USD/CAD Chart Daily – The 100 SMA Held the Decline
USD/CAD has now entered a support zone on the daily chart, bolstered by moving averages, and today we witnessed a rebound. Yesterday’s daily candlestick closed as a doji, indicating a potential positive reversal after the retreat. This was followed by a strong bullish candlestick today, pushing the price 70 pips higher from the lows. The decline in Canada’s May advance wholesale trade also contributed to this upward movement. The softer US New Home Sales didn’t have much impact on the USD.
US New Home Sales for May
- US May new home sales: 0.619 million vs 0.640 million expected
- Prior figure: 0.634 million (revised to 0.698 million)
- Sales declined by: 11.3%
- Supply of new homes: 9.3 months vs 8.1 months in April
- This shows a negative impact of rising interest rates from the Federal Reserve on the housing sector
- Comments from Restoration Hardware and Pool Corp indicate concerns about home expenditures
- Significant drop in lumber prices indicating reduced demand
US May new home sales came in at 0.619 million, falling short of the expected 0.640 million. The prior month’s figure was revised upwards from 0.634 million to 0.698 million, which accounts for a significant portion of the 11.3% drop observed. There were concerning comments from Restoration Hardware and Pool Corp regarding home expenditures, which further underscore the sector’s challenges. Additionally, lumber prices have plummeted, reflecting decreased demand and adding to the sector’s woes. Rate hikes by the Federal Reserve are having a pronounced negative impact on the housing market, as evidenced by these latest figures.
Canada Advance Wholesale Trade for May
- Canada May advance wholesale trade: -0.9%
- The figure for April was +2.4%
- Decline attributed to lower sales in motor vehicles and motor vehicle parts and accessories
- Statistics Canada noted the decline follows a significant increase in April
- The drop is substantial but not unexpected due to the previous month’s jump
Canada’s May advance wholesale trade fell by 0.9%, following a substantial increase of 2.4% in April. According to Statistics Canada, the decline is primarily due to lower sales in the motor vehicle and motor vehicle parts and accessories subsector. While the drop is significant, it is not entirely surprising given the previous month’s notable rise.
USD/CAD Live Chart
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