US retail sales fell below expectations, indicating a decrease in consumer spending. Moreover, continuing claims in the US reached record highs, reflecting a rise in unemployment levels.
Canada is set to release inflation and GDP data, providing insights into the state of the economy and offering clues about the Bank of Canada’s rate cut outlook. The USD/CAD weekly forecast suggests a downward trend as market participants anticipate rate cuts by the Fed starting in September.
The USD/CAD pair experienced a decline last week as the dollar weakened following a mix of data releases focusing on retail sales, employment, and PMI data. While retail sales were disappointing, leading to increased expectations of a Fed rate cut, robust business activity was observed in the manufacturing and services sectors.
Looking ahead, Canada’s upcoming release of inflation and GDP data will be closely watched, along with the US data on GDP and durable goods orders. The Bank of Canada’s recent interest rate cut has sparked interest in whether further cuts will follow, depending on economic indicators. Similarly, the US GDP report may prompt the Fed to consider interest rate cuts, given the significant drop in growth rate.
From a technical standpoint, the USD/CAD price is nearing a crucial support level, indicating a possible shift in sentiment. A break below the support level could pave the way for bears to retest lower levels. Traders are advised to closely monitor these developments and consider their trading strategies accordingly.