Daily Forex News and Watchlist: USD/CAD

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USD/CAD is locked inside a tight range ahead of today’s Canadian GDP and U.S. core PCE releases!

Is the pair in for a breakout? Or will USD/CAD traders take advantage of the pair’s support and resistance zones?

Before moving on, ICYMI, yesterday’s watchlist looked at GBP/USD’s uptrend ahead of the U.S. preliminary GDP release and BOE Gov. Bailey’s speech. Be sure to check out if it’s still a good play!

And now for the headlines that rocked the markets in the last trading sessions:

Fresh Market Headlines & Economic Data:

U.S. GDP for Q3 2023 (2nd read): 5.2% q/q (4.9% q/q forecast; 2.1% q/q previous)

EIA Crude Oil Inventory Change for week ending Nov. 24: 1.85M barrels vs. 860K barrels previous

In an interview, BOE Gov. Bailey shared that “We’re not in a place now where we can discuss cutting interest rates – that is not happening

New Zealand’s building consents rose 8.7% in October after falling 4.6% in September 2023

Japan’s industrial production for October: 1.0% m/m (0.7% m/m forecast, 0.5% m/m previous) as improvements in supply chains and yen weakness helped boost output

Japan’s retail sales for October: 4.2% y/y (5.9% y/y forecast, 6.3% y/y previous)

ANZ NZ business confidence improved from 23.4 to 30.8 in November; “The fall in economy-wide pricing intentions has stalled, but they continue to trend lower for retailers.

Australia’s building approvals for October: 7.5% m/m (1.5% m/m forecast, -4.0% m/m previous)

Australia’s quarterly private CAPEX for Q3: 0.6% q/q (1.0% q/q forecast, 3.4% q/q previous)

Both China’s manufacturing PMI 49.4 (vs. 49.8 expected) AND services PMI 50.2 (vs. 50.9 expected) disappointed estimates in November and pointed to the need for additional government support

Japan’s consumer confidence improved from 35.7 to 36.1 (vs. 35.6 expected) in November

Japan’s housing starts for October: 6.3% y/y (-7.0% y/y forecast, -6.8% y/y previous)

German’s retail sales for October: 1.1% m/m (0.3% m/m forecast, -0.8% m/m previous)

Switzerland’s retail sales for October: -0.1% m/m (0.2% y/y forecast, -1.2% y/y previous)

France’s consumer spending for October: -0.9% m/m (-0.1% m/m forecast, 0.0% m/m previous)

France’s preliminary CPI for November: -0.2% m/m (0.1% m/m forecast, 0.1% m/m previous)

France’s preliminary GDP for Q3: -0.1% q/q (0.1% q/q forecast and previous)

Switzerland’s KOF economic barometer for November: 96.7 (96.3 forecast, 95.1 previous)

Germany’s employment change for October: 22K (21K forecast, 31K previous)

Price Action News

Overlay of EUR vs. Major Currencies

Overlay of EUR vs. Major Currencies Chart by TradingView

The euro started the day on weak footing against the commodity-related currencies but the common currency REALLY started trading near the European session open after France’s data releases missed estimates.

Weaker-than-expected Euro Area data prints drew in interest rate cut bettors and dragged EUR lower against its major counterparts.

EUR is trading the lowest against USD and CHF while experiencing the least losses against GBP and NZD.

Upcoming Potential Catalysts on the Economic Calendar:

Canada’s monthly GDP at 1:30 pm GMT
ECB President Lagarde to give a speech at 1:30 pm GMT
U.S. core PCE price index at 1:30 pm GMT
U.S. initial jobless claims at 1:30 pm GMT
U.S. personal income and spending at 1:30 pm GMT
U.S. Chicago PMI at 2:45 pm GMT
U.S. pending home sales at 3:00 pm GMT
Japan’s unemployment rate at 11:30 pm GMT
China’s Caixin manufacturing PMI at 1:45 am GMT (Dec 1)

Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️

USD/CAD 15-min Forex

USD/CAD 15-min Forex Chart by TradingView

With Canada printing a monthly GDP report and the U.S. dropping a closely watched economic release, you know we’re watching USD/CAD today!

The pair is currently trading near the 1.3600 psychological level, which is juuust below the 1.3612 mark that may be considered the top of a potential range in the 15-minute time frame.

If you haven’t checked out any forex calendars, you should know that traders see Canada printing another growth stagnation in September.

Meanwhile, the U.S. core PCE price index – which may be the Fed’s preferred inflation measure – is expected to mirror the official CPI and PPI releases and show slower price growth.

If today’s reports line up to a weak CAD or increased demand for USD, then USD/CAD may hit the 1.3612 previous highs. In fact, USD/CAD’s average volatility suggests that the pair may have enough juice to reach the R1 (1.3620) Pivot Point resistance.

I wouldn’t discount another trip lower for the pair though. A pro-risk environment, for example, could drag USD lower across the board including against CAD. OPEC and its friends are also publishing their meeting results today. If we see pro-oil moves, then CAD may gain enough support to drag USD lower.

Watch how USD/CAD reacts to the 1.3600 – 1.3615 resistance zone. If it looks like there may be enough bullish candlesticks to force an upside breakout, then we may consider extending USD/CAD’s upswing that started yesterday.

But if USD/CAD turns lower from the previous resistance, or if today’s market themes turn against the U.S. dollar, then we can eye previous areas of interest like the Pivot Point (1.3580) line or the 1.3570 range support as potential short trade targets.

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