Canadian Dollar looking for fresh upside against the USD

Loonie is tracking crude barrel prices, USD closely.
Canada GDP is expected to see sluggish growth.
Canadian inflation remains sticky, keeping the BoC on its toes.

Joshua Gibson FXStreet

The Canadian Dollar (CAD) is seeing minor gains against the US Dollar (USD) on Thursday as the Greenback eases off from recent gains. With Oil barrel prices also taking a quick breather, and crude Canada’s main export, the CAD is seeing limited momentum. The USD/CAD is largely flat for Thursday, down a scant 0.2% at its lowest point as the pair threatens consolidation near 1.3500.

Canada's economic data remains thin on the calendar, with Friday’s Gross Domestic Product (GDP) figures closing out an otherwise data-empty trading week. Canadian GDP for the month of July is forecast to print a meager 0.1% versus the previous month’s -0.2%. Oil prices and the broad-market US Dollar Index (DXY) are set to remain the CAD’s main drivers on the charts.

Daily Digest Market Movers: Canadian Dollar flat as Oil, USD step back

The CAD gained nearly 2.3% against the USD in September, bolstered by scorching Oil prices.
The USD/CAD is currently down 1.5%, with surging DXY winning the head-to-head battle with crude barrel prices in the near term.
Canadian GDP is seen struggling to firm up growth as stubborn inflation remains.
Bank of Canada (BoC) officials have been routinely hitting the wires trying to jawbone inflation lower with threats of higher interest rates.
The BoC’s Governor Macklem and Deputy Governor Kozicki have made appearances, reiterating calls for rates to remain higher for longer as inflation still remains too high.
Canada was the world’s second-largest oil exporter in Dollar-adjusted terms, exporting over $120 billion USD of crude in 2022, nearly 9% of the entire global oil export market.
One of the top oil exporting countries globally, the Loonie sees a majority of its momentum dictated by barrel prices.

Technical Analysis: Canadian Dollar struggling to hold onto 1.35

The Canadian Dollar (CAD) has gained against the US Dollar (USD) from September’s peak in the USD/CAD near 1.3695, and is set to close out the month near where it started at 1.3500, if directional momentum remains elusive heading into the final days of September’s trading.

The USD/CAD is set to close near flat for Thursday's trading session, near 1.3500 with oil-push and USD-pull both receding simultaneously. Intraday action saw the pair bounce from the 200-hour Simple Moving Average (SMA) near 1.3480, with the day's low marked in around 1.3470.

The USD/CAD is currently pinned to the 34-day Exponential Moving Average (EMA) at the 1.3500 handle, with near-term support from the 200-day Simple Moving Average near 1.3450. A floor is priced in from the last swing low into 1.3380, while 1.3650 remains a significant technical resistance barrier that has rejected price action multiple times this year.

Here's what you need to know on Friday, September 29:

During the Asian session, Japan will release critical economic reports including the September Tokyo Consumer Price Index, the August Unemployment Rate, Industrial Production, Retail Sales, and Housing Starts. In Australia, Private Sector Credit data is due. Later in the day, a new estimate of UK Q2 GDP and Consumer Credit will be reported, while Germany will release Retail Sales and the Unemployment Rate. The key report to watch will be the Eurozone CPI. The focus will then shift to the US Core Personal Consumption Expenditures and Canada's monthly GDP.

Check it out!

Author

Joshua Gibson

FXStreet

Joshua joins the FXStreet team as an Economics and Finance double major from Vancouver Island University with twelve years' experience as an independent trader focusing on technical analysis.

GBP/USD: Daily gains remain capped by 1.3650

GBP/USD leaves behind Monday’s pessimism and advances marginally on Tuesday. Cable’s humble gains, however, appear to have met quite a decent resistance in the 1.3650 zone for now, in a context of a slight selling pressure hovering around the Greenback.

EUR/USD struggles to regain pace; gyrates around 1.1670

EUR/USD clinches humble gains around 1.1670 following Tuesday’s close on Wall Street. Indeed, marginal losses in the US Dollar encourages spot to set aside two dauly pullbacks in a row and maintain the 1.1700 barrier on the cross-hairs for now. Moving forward, US inflation tracked by the PCE and another revision of Q2 GDP data should keep investors entertained on Wednesday.

Gold steadies near $4,650, eyes multi-month high ahead of US PCE

Gold stabilizes around $4,650 after the previous day's two-way swings as traders await the US PCE data, due later this Wednesday, for cues about the Fed's policy path. The outlook will drive the US Dollar and the non-yielding bullion. Meanwhile, renewed hopes for a US-Iran peace deal, weak oil prices, sliding US bond yields and diminishing odds of an immediate tightening by the Fed undermine the USD. This keeps the precious metal close to its highest level since May 14, set on Tuesday.

Ethereum rally calms after reclaiming $2,300 on-chain cost basis

After a +30% gain last week, Ethereum (ETH) broke above its realized price, or average on-chain cost basis, at $2,306. That move also pushed it above the realized price of different wallet cohorts. Historically, profit-taking often increases when prices break above investors' average on-chain cost basis for the first time after an extended bearish period.

Canada hits US goods with tariffs; The rate market sees a problem

On September 8, Canada begins charging its own importers 15%, 25% and 50% on roughly 700 lines of American goods. The measure is billed as dollar for dollar, and on the arithmetic of covered trade it is. What it is not is a tax on the United States.