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USD/CAD looks ready to break a technical resistance area ahead of Canada’s GDP release!
Can CAD bulls turn things around or will USD be too strong for the comdoll in the next trading sessions?
Before moving on, ICYMI, yesterday’s watchlist checked out AUD/USD’s support zone ahead of Australia’s retail sales release. Make sure to check out if it’s still a valid play!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
CB China Leading Economic Index read for February: -0.1% m/m to 151.8; January upwardly revised to 0.1%
In its quarterly bulletin, SNB shared that reduced inflation and CHF strength factored in the rate cut, and that current inflation forecasts are “within the range of price stability”
EIA’s crude oil inventories rose by 3.2M barrels in the week ending March 22 (-0.7M forecast, -2.0M previous)
In a prepared statement titled “There’s Still No Rush,” voting FOMC member Christopher Waller shared his preference for reducing the number of Fed interest rate cuts or pushing them “further into the future”
BOJ’s Opinions Summary repeated that “Japan’s economy is not in a state where rapid policy interest rate hikes are necessary.”
Australia’s Melbourne Institute inflation expectations declined from 4.5% y/y to 4.3% y/y in March and marked the lowest since 2021
Australia’s retail sales for February: 0.3% m/m (0.4% forecast, 1.1% previous)
Australia’s private sector credit rose by another 0.5% m/m in February (0.4% m/m forecast)
New Zealand’s ANZ business confidence fell 12 pts from 34.7 to 22.9 in March; Inflation expectations dipped from 4.0% to 3.8%; “Cost and wage pressures remain very high”
Germany’s retail sales unexpectedly fell by 1.9% m/m in February (0.3% forecast, -0.4% previous), dashing hopes that consumption could help offset weak industrial production conditions
Price Action News
Overlay of USD vs. Major Currencies Chart by TradingView
With not a lot of market-moving data releases, traders seem to have focused on Fed member Christopher Waller’s remarks late Thursday.
The voting FOMC member cited slowing progress against high inflation and strong labor and growth prospects as his reasons for preferring fewer Fed interest rate cuts this year OR for the Fed to push back its first interest rate cut.
The U.S. dollar gained some ground at the speech but also lost most of its gains at the start of Asian session trading. European session traders feel differently, though, because USD shot up again and is heavily in the green against its major counterparts (except JPY).
Upcoming Potential Catalysts on the Economic Calendar:
Canada’s monthly GDP at 12:30 pm GMT
U.S. final Q4 2023 GDP at 12:30 pm GMT
U.S. Chicago PMI at 1:45 pm GMT
U.S. pending home sales at 2:00 pm GMT
U.S. revised UoM consumer sentiment at 2:00 pm GMT
Tokyo’s core CPI at 11:30 pm GMT
Japan’s preliminary industrial production at 11:50 pm GMT
Japan’s retail sales at 11:50 pm GMT
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! ️
USD/CAD 15-min Forex Chart by TradingView
USD/CAD is retesting a key monthly resistance zone! As mentioned above, the U.S. dollar saw a fresh wave of buying that took it higher especially against “risky” bets like AUD, NZD, CAD, and GBP.
The dollar’s strength seems to have bumped USD/CAD above the 1.3600 psychological level which also lines up with the R1 Pivot Point line.
Canada is releasing its monthly GDP data later today while Uncle Sam will print a bunch of lower-tier reports like the final Q4 2023 GDP, initial jobless claims, pending home sales, and revised UoM consumer sentiment figures.
Will we see an upside breakout today? Or will enough USD bears step in and drag USD/CAD back down to its 1.3570 – 1.3600 range? Leave your thoughts in the comments section below!
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