USD/CAD jumps near multi-month highs after US and Canadian data

The pair is about to reach overbought conditions, trading around the 1.3500 zone, showing more than 0.30% of daily gains.
Canadian’s CPI came in higher than expected, while US Retail Sales showed strong figures.
Lower Oil prices limited the CAD’s potential.

Patricio Martín FXStreet

The USD/CAD saw green on Tuesday and increased near highs since early June, trading around 1.3500. On the one hand, the optimistic US Retail Sales from July made the market discount a more aggressive bet by the Federal Reserve (Fed) and favoured the USD. On the other hand, the Consumer Price Index (CPI) from July came in higher than expected, favouring the Canadian dollar, while lower Oil prices limited the upside potential.

Canadian CPI from July came in higher than expected, as well as US Retail sales

Canadian inflation for July came in hot. The Consumer Price Index (CPI), advanced 0.3% Mom while the annualised measure accelerated to 3.2%, higher than the 3% expected and the previous 2.8%. The Core figure rose to 3.2% vs the 2.8% expected from the last 2.8%.

Regarding the next Bank of Canada (BoC), according to the World Interest Rate Possibilities (WIRP) tool, markets discount high odds of a 25% chance of a hike on September 6 and then increase to approximately 55% by October 25. Looking further ahead, it climbs to about 60% by December 6. In that sense, hawkish bets on the BoC may support the CAD in the following sessions.

On the other hand, July’s US Retail Sales exceeded expectations. The headline rose by 0.7% MoM, higher than the 0.4% expected. Sales Excluding the Automobile sector also met expectations and came in at 1% vs the 0.4% expected. The USD gained some momentum as a reaction, but the DXY traded relatively flat during the session. With that said, attention now turns to the Federal Open Market Committee (FOMC) meeting minutes released scheduled for Wednesday, where investors will look for clues regarding the Federal Reserve's (Fed) next steps. As for now, the stronger case, according to the CME FedWatch tool, is that the Fed will skip in September and then hike in November by 25 basis points (bps)

USD/CAD Levels to watch

According to the daily chart analysis, short-term prospects for USD/CAD look bullish. Both Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) remain positive and are near overbought conditions. Moreover, the pair is above the 20,100,200-day Simple Moving Averages (SMA), indicating that the buyers command the broader perspective.

Support levels: 1.3450 (200-day SMA), 1.3400, 1.3380 (100-day SMA).

Resistance levels: 1.3510, 1.3550, 1.3570.

USD/CAD Daily chart

USD/CAD

Overview
Today last price	1.35
Today Daily Change	0.0039
Today Daily Change %	0.29
Today daily open	1.3461

Trends
Daily SMA20	1.3293
Daily SMA50	1.3269
Daily SMA100	1.3386
Daily SMA200	1.345

Levels
Previous Daily High	1.348
Previous Daily Low	1.3437
Previous Weekly High	1.3502
Previous Weekly Low	1.3356
Previous Monthly High	1.3387
Previous Monthly Low	1.3093
Daily Fibonacci 38.2%	1.3463
Daily Fibonacci 61.8%	1.3453
Daily Pivot Point S1	1.3438
Daily Pivot Point S2	1.3416
Daily Pivot Point S3	1.3395
Daily Pivot Point R1	1.3482
Daily Pivot Point R2	1.3502
Daily Pivot Point R3	1.3525

Author

Patricio Martín

FXStreet

Patricio is an economist from Argentina passionate about global finance and understanding the daily movements of the markets.

AUD/USD falls to near 0.7100 after slipping below 50-day EMA

AUD/USD depreciates after registering minor gains in the previous day, trading around 0.7120 during the Asian hours. The technical analysis of the daily chart shows the pair consolidating sideways within a rectangle pattern, as neither bulls nor bears gain control. The AUD/USD pair is holding a slight bearish tone however as it sits beneath both the nine-day and 50-day EMAs.

160.00: USD/JPY back near intervention territory after upbeat US jobs report

US Nonfarm Payrolls beat expectations by a wide margin in May, with 172K jobs added. The US Dollar rebounds after the release, helping USD/JPY recover from its intraday lows. Warnings from Japanese authorities continue to limit upside potential near the 160.00 threshold.

Gold targets $4,300 amid stronger Dollar

Gold faces increasing selling interest and navigates the area of three-month lows near the $4,300 mark per troy ounce on Friday. The precious metal’s decline comes as traders assess the stronger-than-expected NFP, while the bid bias in the Greenback and higher US Treasury yields also collaborate with the retracement.

Cardano hits five-year low even as Hoskinson clarifies "break" isn't an exit

Cardano (ADA) price is down 10% at press time on Friday, extending losses over 30% so far this week amid Charles Hoskinson's clarification that "break" isn't an exit.

Week ahead – Fed countdown begins amid US inflation data and geopolitical risks

Fed Chair Warsh’s first meeting approaches as key US inflation data could reshape expectations. Oil prices remain elevated as US-Iran talks continue; tariffs also return to the spotlight. ECB is expected to hike; will it be a one-off move or is July live?

The US economy defies the rules: 100 days into the Oil shock and the recession signal is still missing

More than three months after the start of the Iran war and the resulting disruption to global energy markets, the US economy continues to display remarkable resilience. The conflict has triggered a sharp rise in Oil prices, reignited inflationary pressures and fueled widespread concerns about a potential economic slowdown.