Baxia Markets
May 24, 2024

USDCAD Pullback as Traders Await Durable Goods and Retail Sales Data

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The USDCAD pair is currently experiencing a pause in its upward momentum, awaiting key economic data releases from both the US and Canada. The United States is set to release Durable Goods Orders and Core Durable Goods Orders data, with economists offering mixed forecasts, suggesting a lack of strong bullish sentiment. Similarly, Canada will announce its Retail Sales and Core Retail Sales figures, also facing mixed predictions from economists. These uncertain forecasts are likely contributing to the current pullback in USDCAD.

Technically, the pair maintains a bullish outlook. On the 1-hour timeframe, the EMA 50 remains positioned above the EMA 200, indicating continued bullish sentiment. The Ichimoku indicator supports this view, with the Tenkan-sen, Kijun-sen, and Chikou Span lines all situated above the cloud.
The MACD and RSI indicators also reflect bullish sentiment, albeit with some caution. The MACD histogram is currently below the signal line, signaling a pullback. If the histogram crosses back above the signal line and both remain above the zero level, it would indicate a resumption of the bullish trend. The RSI, which reached the overbought zone yesterday, has now descended below 50%. If the RSI can stay above 40%, it would suggest that the bullish momentum remains intact.

Overall, USDCAD is in a bullish correction phase. Today's economic news from both sides of the border will likely provide clearer direction. Should the data support a continuation of the bullish trend, or if it points towards a potential bearish reversal, traders will need to watch closely to make informed decisions.

Key Takeaways

  1. USDCAD is in a bullish correction phase, pausing ahead of key economic data.
  2. Mixed forecasts for US Durable Goods Orders and Canadian Retail Sales contribute to the pullback.
  3. Technical indicators, including EMA and Ichimoku, maintain a bullish sentiment.
  4. MACD and RSI are showing a pullback within the bullish trend; MACD histogram below the signal line.
  5. Today's economic releases will be crucial in determining if the bullish trend continues or reverses.

Key Economic Releases to Watch Today

EUR, German GDP (QoQ)

Actual 0.2% vs Forecast 0.2% vs Previous -0.3%

EUR, German GDP (YoY)

Actual -0.2% vs Forecast -0.2% vs Previous -0.2%

GBP, Core Retail Sales (MoM)

Actual -2.0% vs Forecast -0.6% vs Previous -0.6%

GBP, Core Retail Sales (YoY) 

Actual -3.0% vs Forecast -1.1% vs Previous 0.4%

GBP, Retail Sales (MoM)

Actual -2.3% vs Forecast -0.5% vs Previous -0.2%

GBP, Retail Sales (YoY)

Actual -2.7% vs Forecast -0.2% vs Previous 0.4%

USD, Core Durable Goods Orders (MoM)

Forecast 0.1% vs Previous 0.2%

USD, Durable Goods Orders (MoM)

Forecast -0.9% vs Previous 2.6%

CAD, Core Retail Sales (MoM)

Forecast 0.3% vs Previous -0.3%

CAD, Retail Sales (MoM)

Forecast -0.1% vs Previous -0.1%





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