Baxia Markets
June 20, 2024

US Economic Data to Determine USDCAD's Next Move After Retail Sales Miss

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USD/CAD is currently hovering around 1.3710 in early Asian trading on Thursday, marking a reversal from its recent downtrend. The US Dollar's rebound, however, faces resistance amid tempered expectations of a Federal Reserve rate cut, triggered by disappointing US Retail Sales data for May.

Investor attention remains fixated on upcoming US economic indicators, including Initial Jobless Claims, Building Permits, Housing Starts, the Philly Fed Manufacturing Index, and speeches by Fed officials later today. A positive outcome in Initial Jobless Claims could bolster the US Dollar and potentially restrict losses for USD/CAD.image-png-Jun-20-2024-10-55-57-2765-AM

From a technical standpoint, on the 1-hour timeframe, USD/CAD is characterized by a clear descending channel. The market is currently positioned below the cloud, with the EMA indicators showing a death cross pattern, indicative of sustained bearish sentiment. Notably, multiple bearish engulfing candlestick patterns have emerged, with the latest setting a key resistance level at 1.3725, coinciding with the EMA 200 and the lower boundary of the value area zone marked in pink.

Today's market sentiment leans slightly bullish as USD/CAD tests the aforementioned resistance level. However, the prevailing bearish pressure suggests a potential weakening of the US Dollar, particularly if today's US economic data falls short of expectations or presents a mixed outlook. Both MACD and RSI indicators corroborate the bearish outlook, underscoring the current strength of selling pressure on the USD.

In summary, the movements of USD/CAD are heavily influenced by contrasting monetary policy expectations between the Fed and the Bank of Canada, alongside pivotal US economic data releases that dictate market sentiment. Traders are advised to monitor technical signals and economic updates closely for further insights into the pair's trajectory.

Key Economic Releases to Watch Today

Time (GMT) Currency Event Importance Actual Forecast Previous
05:45 NZD GDP Growth Rate QoQ High 0.2% 0% -0.1%
  NZD GDP Growth Rate YoY Medium 0.3% 0.2% -0.3%
08:15 CNY Loan Prime Rate 5Y Medium 3.95% 3.95% 3.95%
  CNY Loan Prime Rate 1Y Medium 3.45% 3.45% 3.45%
13:00 EUR New Car Registrations YoY Medium -3% 13.7%  
  CHF Balance of Trade Medium CHF4.1B CHF3.7B CHF3.9B
  EUR PPI YoY Medium -2.2% -2% -3.3%
14:00 EUR ECB General Council Meeting Medium      
14:30 CHF SNB Interest Rate Decision High 1.25% 1.25% 1.5%
17:00 EUR Consumer Confidence Medium   89 84.5
18:00 GBP BoE MPC Vote Cut High   7/9 2/9
  GBP BoE MPC Vote Unchanged High   7/9 7/9
  GBP BoE MPC Vote Hike High   0/9 0/9
  GBP MPC Meeting Minutes High      
  GBP BoE Interest Rate Decision High   5.25% 5.25%
19:30 CAD New Housing Price Index MoM Medium   0.2% 0.2%
  CAD New Housing Price Index YoY Medium   0.1% -0.1%
  USD Current Account Medium   $-206.4B $-194.8B
  USD Building Permits MoM Prel Medium   2% -3%
  USD Building Permits Prel Medium   1.45M 1.44M
  USD Housing Starts MoM Medium   2.2% 5.7%
  USD Housing Starts Medium   1.37M 1.36M
  USD Philadelphia Fed Manufacturing Index Medium   5 4.5
  USD Initial Jobless Claims High   235K 242K
21:00 EUR Consumer Confidence Flash Medium   -13.6 -14.3
22:00 USD EIA Gasoline Stocks Change Medium   1.1M 2.566M
  USD EIA Crude Oil Stocks Change Medium   -2M 3.73M

This table organizes the economic events by time, currency, event description, importance, and


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