MAs Hold the Retreat in USDCAD as Canadian Economy Slows Further
USDCAD went through a massive surge since the last week of September, gaining 4 cents higher, but it has been retreating since yesterday.
USDCAD went through a massive surge since the last week of September, rallying more than 4 cents higher, but it has been retreating since yesterday. However, moving averages continue to support the pullbacks in this pair, with the 100 SMA holding as support now on the H1 timeframe chart.
After the release of Canada’s inflation report, which showed another decline in the headline rate, USD/CAD extended its gains, peaking at 1.3838 early yesterday. Despite a slight uptick in core CPI from 1.5% to 1.6%, the September headline CPI fell to 1.6%, below the expected 1.8%. This data triggered some profit-taking, which has carried over into today.
USD/CAD Chart H1 – MAs Supporting During Retreats Lower
Given that both inflation readings remain below the Bank of Canada’s 2% target, we decided to open a buy position on USD/CAD yesterday, as this weak inflation outlook weighs on the CAD. The 100 SMA (green) has provided support on the H1 chart, holding us in the trade even though we’re currently facing some losses. Now the price has bounced off this moving average after the economic data from Canada earlier on.
Canadian August 2024 Manufacturing Sales Report
- Canada August manufacturing sales: -1.3% vs. -1.5% expected
- Lowest sales level since January 2022
- Previous month saw a 1.4% increase
- Manufacturing sales totaled C$69.4 billion in August
- Declines led by primary metals (-6.4%) and petroleum/coal products (-3.7%)
- Year-over-year, sales decreased by 4.4%
- Sales in constant dollars fell 0.8%
- Key Details:
- Manufacturing sector recorded eighth consecutive month of y/y declines
- Primary metals impacted by reduced domestic and international demand
- Petroleum products affected by global economic uncertainties, especially in China
- Aerospace production saw a 7.3% increase, reaching the second-highest level on record
- Sales declined in 8 of 10 provinces, with Alberta (-3.3%) and Ontario (-0.6%) leading the drop
Canadian September 2024 housing starts
- Canada September housing starts 223.8K vs 237.5K expected
- August housing starts was 217.4 (revised to 213.0K)
USD/CAD Live Chart
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