Household spending in Canada is beginning to stabilize.

The Canadian dollar has been consistently weakening due to divergent monetary policy trends between the Bank of Canada and the US Federal Reserve, which continues to support the US dollar. Additionally, consumer spending in Canada has remained sluggish, as seen from steady retail sales in the first quarter. This slowdown may lead the Bank of Canada to consider reducing interest rates at its upcoming policy meeting in June.

Average weekly earnings for non-agricultural workers in Canada increased by 4.5% annually to $1,232, with 13 out of 20 sectors reporting higher incomes. The government sector saw the largest income increase, followed by finance and insurance. Conversely, the manufacturing sector experienced the smallest income growth due to high interest rates and cost inflation.

Retail sales in Canada showed a slight increase in March, contrary to analysts' expectations of a 0.1% increase, with sales declining in 5 out of 9 categories, led by a decrease in sales of petroleum products and automotive dealers and parts. This decline is attributed to reduced consumer spending capacity.

Canada's industrial producer price index rose by 0.8% in March, in line with market expectations, driven by increased costs of non-ferrous metal products such as silver and gold. Additionally, copper and nickel prices continued to rise due to delayed shipments from Indonesia and reduced production in China, while the costs of meat products and energy remained consistently high.

The inflation rate in Canada increased by 2.9% annually in March, close to the Bank of Canada's 3% forecast, driven by rapidly rising gasoline prices, leading to increased transportation costs. The Bank of Canada expects inflation to continue to moderate by the end of the year.

The yield on Canadian government bonds rose by more than 3.87% over 10 years, outpacing US government bond yields due to higher inflation rates and robust US labor market data. However, the slowing GDP growth has reduced expectations for the Federal Reserve to reduce interest rates, despite weaker-than-expected economic growth in the United States.

Techical analysis data (5H)

Resistance: 1.3657, 1.3668, 1.3678

Source: Investing.com

Buy/Long 1: If the price touches support in the price range of 1.3626 - 1.3636 but cannot break the support at 1.3636, you may set a TP at approximately 1.3668 and SL at around 1.3615 or according to your acceptable risk.

Buy/Long 2: If the price breaks the resistance in the price range of 1.3657 - 1.3668, you may set a TP at approximately 1.3678 and SL at around 1.3626 or according to your acceptable risk.

Sell/Short 1: If the price touches resistance in the price range of 1.3657 - 1.3668 but cannot break the resistance at 1.3657, you may set a TP at approximately 1.3626 and SL at around 1.3678 or according to your acceptable risk.

Sell/Short 2: If the price breaks the support in the price range of 1.3626 - 1.3636, you may set a TP at approximately 1.3615 and SL at around 1.3668 or according to your acceptable risk.

Pivot point April 26, 2024 08:08 PM. GMT+7