Canada is printing its retail sales figures today and Uncle Sam is about to drop its latest PMI numbers!
How will the releases affect USD/CAD’s price action?
Before moving on, ICYMI, yesterday’s watchlist checked out GBP/CHF’s Pivot Point resistance after the SNB surprised the markets with a steady interest rate decision. 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:
The Bank of England held its main policy rate at 5.25% on Thursday, largely expected after a lower-than-expected U.K. CPI read earlier, with a vote of 5-4 for holding.
U.S. initial jobless claims dropped by 20K to an eight-month low of 201K
Euro Area Flash Consumer Confidence Index for September: -17.8 (-17.3 forecast; -16.0 previous)
U.S. Existing Home Sales for August: -0.7% m/m to 4.04M units (1.5% m/m forecast; -2.2% m/m previous)
Philly Fed’s factory activity contracted, down from 12.0 to -13.5 in September
U.S. current account deficit unexpectedly narrowed from $214B to $212B in Q2 and reflected surpluses on services and primary income that were mostly offset by higher goods deficit
In an interview late Thursday, ECB Chief Economist Philip Lane said interest rates have reached a level that could help bring down inflation but that the ECB will set them “at sufficiently restrictive levels for as long as necessary.”
Westpac: New Zealand household confidence fell 2 points from 83.1 to 80.2 in September as living and mortgage costs continue to rise
New Zealand’s trade deficit widened from 1.2B NZD to 2.3B NZD in August as weaker Chinese demand weighed on exports
Judo Bank flash Australian PMIs showed manufacturing PMI down from 49.6 to a three-month low of 48.2; services PMI picked up from 47.8 to a four-month high of 50.5
GfK: U.K.’s consumer confidence rose from -25 to -21 (vs -26 expected), its highest level since January 2022
Japan’s national core CPI grew by 3.1% y/y in August (vs. 3.0% expected, 3.1% previous)
BOJ kept ultra-low interest rates unchanged at -0.10% as expected; Gov. Ueda said that they’re “monitoring currency moves carefully” for their impact on inflation
U.K.’s retail sales rebounded by 0.4% in August (0.5% expected, -1.1% previous) on a rebound after a month of wet weather
Price Action News
Overlay of NZD Pairs: 15-min Charts
Price action during the Asian session was mixed, with crude oil, bitcoin, and commodity-related currencies gaining some ground while Asian and early European equities traded lower.
NZD got an extra boost against its peers, probably due to New Zealand printing better-than-expected consumer confidence numbers. It also didn’t hurt that Australia has resolved its LNG strike while concerns over the European region’s growth limited the demand for European currencies.
NZD is trading higher across the board but is registering the most gains against JPY, GBP, and CHF.
Eurozone’s manufacturing and services PMIs at 8:00 am GMT
U.K.’s manufacturing and services PMIs at 8:30:00 am GMT
U.K. CBI industrial order expectations at 10:00 am GMT
Canada’s retail sales data at 12:30 pm GMT
FOMC member Lisa Cook to give a speech at 12:50 pm GMT
U.S. manufacturing and services PMIs at 1:45 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 TV
An unmistakably hawkish FOMC event pushed the U.S. dollar higher against its major counterparts yesterday including against the Canadian dollar.
But the Loonie is not without its fans especially with crude oil prices creeping back up after a shallow pullback.
We’re watching the 1.3450 – 1.3460 zone, which lines up with this week’s support zone and a key area of interest from the previous week.
Later today, Canada is expected to print higher retail sales numbers in August than it did in July.
On the other hand, the U.S. could also see slightly higher manufacturing and services PMIs that may underscore the Fed’s confidence to keep its interest rates high for a longer period of time.
An extension of yesterday’s USD rallies could pump USD/CAD back up to its 1.3480 previous highs. As you can see, the potential profit target isn’t too far from the 15-minute chart’s 100 SMA and Pivot Point line.
Meanwhile, a risk-friendly trading environment could mean more gains for CAD. Risk-taking could drag USD/CAD to new intraday lows and maybe drag the pair down to the S1 (1.3450) Pivot Point line.
Keep your eyes glued to the tube during the U.S. and Canadian data releases so you don’t miss out on possible trade opportunities!
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