USD vs CAD - USD/CAD traders struggle to maintain control after the currency pair's directional shift yesterday, following a move from three-month highs. Nevertheless, the exchange rate remains uncertain, hovering around 1.3520 on Thursday morning in Europe.
 
The Loonie currency pair reflects market caution ahead of a series of U.S. economic data and the annual two-day Jackson Hole Symposium. Additionally, the uncertainty of oil prices and the sluggish movement of the U.S. Dollar also present challenges for USD/CAD traders recently.
 
The U.S. Dollar Index (DXY) remains stagnant around 103.40 after a drop from an 11-week high the day before, while WTI crude oil prices, a major Canadian export, experienced a slight decline around $78.40, erasing some recovery from a one-month low hit on Wednesday.
 
It is important to note that a significant drop in oil stocks, based on weekly information from the U.S. Energy Information Administration (EIA), contradicts market concerns about declining energy demand due to the latest disappointing PMI, creating difficulties for market participants in oil and the USD/CAD currency pair.
 
In this context, U.S. statistical data tends to show weak performance, while the data related to Canada does not create an impressive impression. This has negatively impacted market sentiment toward the USD/CAD pair, although recent concerns about interest rate hikes that previously triggered declines have slightly eased.
 
On Wednesday, the initial S&P Global U.S. Manufacturing PMI index dropped to 47.0 in August, down from a previous figure of 49.0, compared to market expectations of 49.3.
 
Meanwhile, the Services PMI index also saw a slight decline to 51.0, down from a previous forecast of 52.2 and from 52.3 in the previous month. Thus, the S&P Global Composite PMI for the U.S. fell to 50.4 for the month, down from 52.0 previously and below analyst expectations.
 
Additionally, data on changes in U.S. New Home Sales showed a month-over-month increase of 4.4% in July, reversing a previous reading that recorded a decline of -2.5%.
 
Domestically, the report on Canadian Retail Sales for June experienced a revision of growth to 0.1% month-over-month, differing from the previous market consensus of 0.0%.
 
Meanwhile, Retail Sales excluding the Automotive sector saw a sharp decline of -0.8%, compared to a previously revised figure of -0.3%, and against the market expectation of 0.3%.
 
Describing the market situation, S&P 500 futures rose about 0.5% to 4,470 at the time of this article, following the largest gain in a month the day before. Furthermore, U.S. 10-year Treasury yields fluctuated around 4.20%, halting a two-day decline from the highest levels since 2007 after the largest daily drop in three weeks.
 
Regarding upcoming prospects, important data requiring attention includes U.S. Durable Goods Orders, Chicago Fed National Activity Index, Kansas Fed Manufacturing Activity, and weekly Jobless Claims.
 
However, the most crucial is the defense that Federal Reserve Chair Jerome Powell will present for the hawkish monetary policy. This will be very important to monitor as recent data from the U.S. indicates that steps towards the end of the rate hike period are drawing closer. If confirmed, this could exert pressure on the U.S. Dollar and support sellers of the Loonie currency pair.
 
Technical reviews from fxstreet.com indicate that a daily close below the rising support line established over the last three weeks, which currently acts as the nearest resistance level around 1.3545, keeps sellers of the USD/CAD currency pair optimistic.
 
Warning!
 
This analysis is based on perspectives from fundamental and technical viewpoints from trusted sources and is not advice or encouragement. Always remember that this content aims to enrich the information of readers. Always conduct independent research on other forex information as a reference for your trading.
 
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