USDCAD Unmoved After Conflict in Manufacturing & Services PMI Data
The USDCAD is relatively steady at 1.31351 after the Markit Flash Manufacturing PMI and Services PMI showed conflicting data. While the Flash Manufacturing PMI came in worse-than-expected at 51.7 (versus consensus of 52.4), the Flash Services PMI came in slightly better-than-expected at 53.2 (versus consensus of 52.9).
These data also come on the backdrop of conflicting retail sales data from Canada. As such, both currencies in the pair have maintained the status quo, trading more or less where they were against each other before the key data releases.
The USDCAD tested the resistance at 1.31501 on Wed and Thursday but was unable to gather enough momentum to break it. Today’s price action is trading just short of this mark. With little else happening in terms of fundamentals before the markets shut down for the week, this resistance looks like it will still hold.
If the USDCAD is rejected at 1.31501 after multiple trials, a possible retreat to 1.30632 cannot be ruled out, subject to further weakening of the USD based on fundamentals for next week. Below this area, 1.29953 may come into focus later as it waits to make its presence felt.
On the flip side, if the USDCAD can find more strength to push above the current resistance, then we may see a push towards 1.32030 and possibly 1.32254. 1.32974 to 1.33487 lies ahead and is a range that marks the beginning of a resistance zone that was last breached in June 2019. The chart below shows the technical price levels to watch.