Canada's economy grew only slightly.

The Canadian dollar continued to strengthen due to the country's declining inflation rate. This has led investors to believe that the Bank of Canada is likely to further reduce interest rates in the second half of 2024 and early 2025. Meanwhile, the U.S. dollar also weakened, influenced by expectations of a rate cut by the Federal Reserve in September.

Canada posted a trade surplus of over CAD 64 billion in June, marking the first trade surplus since February. Exports rose by 5.5% to CAD 66.7 billion, largely driven by increased sales of unprocessed metals, including gold, silver, and platinum, as well as crude oil exports, which were bolstered by rising commodity prices.

Imports to Canada increased by 1.9% to CAD 66 billion, with growth seen in 9 out of 11 product categories. The automotive and parts sector contributed the most to this increase, rising by 5.1%, mainly due to the import of personal vehicles following production disruptions and delivery delays in the United States. Additionally, consumer goods imports rose by 3.7%, indicating that domestic demand remains resilient.

Foreign investors purchased CAD 5.2 billion in Canadian securities in June, marking four consecutive months of foreign investment. However, the amount invested was still below the forecast of CAD 15.9 billion. Most of the investment remained in corporate bonds, followed by government bonds, while investment in the Canadian stock market saw a significant decline as investors continued to view equity assets as too risky.

The yield on Canada's 10-year government bonds rose by over 3.1%, following the increase in U.S. government bond yields, driven by strong U.S. economic data. This has led investors to anticipate a 25 basis point rate cut by the Federal Reserve in September. Strong U.S. retail sales data highlighted resilient consumer spending, easing concerns over a recession. Meanwhile, Canada's labor market saw a continued rise in unemployment, with declining employment in the manufacturing sector further reinforcing expectations that the Bank of Canada will continue to lower interest rates.

Techical analysis data (5H)

Resistance: 1.3612, 1.3624, 1.3642

Source: Investing.com

Buy/Long 1: If the price touches support in the price range of 1.3566 - 1.3583 but cannot break the support at 1.3583, you may set a TP at approximately 1.3624 and SL at around 1.3554 or according to your acceptable risk.

Buy/Long 2: If the price breaks the resistance in the price range of 1.3612 - 1.3624, you may set a TP at approximately 1.3642 and SL at around 1.3566 or according to your acceptable risk.

Sell/Short 1: If the price touches resistance in the price range of 1.3612 - 1.3624 but cannot break the resistance at 1.3612, you may set a TP at approximately 1.3566 and SL at around 1.3642 or according to your acceptable risk.

Sell/Short 2: If the price breaks the support in the price range of 1.3566 - 1.3583, you may set a TP at approximately 1.3554 and SL at around 1.3624 or according to your acceptable risk.

Pivot point August 22, 2024 10:02 PM. GMT+7