Canada's GDP expands slightly.

The Canadian dollar weakened slightly as the U.S. dollar surged rapidly following the release of hotter-than-expected Consumer Price Index (CPI) data, which rose by 3% compared to the expected 2.9%. This increase in inflation reinforced the Federal Reserve's stance that interest rates may remain unchanged to curb inflation, aligning with statements from Chairman Powell.

Regarding Canada's economic data, a resilient labor market has allowed the Bank of Canada to observe a slowdown in the labor market. However, investors remain concerned about the 25% tariffs on steel and aluminum imposed by former President Trump, which could further heighten trade tensions.

In December 2024, Canada's GDP grew by 0.2% month-over-month, marking a return to expansion after contracting the previous month. This growth was strongly supported by the retail, manufacturing, and construction sectors, which helped offset declines in the real estate and rental sectors. On an annual basis, Canada's GDP is expected to grow by 1.4%, aligning with the Bank of Canada's forecasts. However, this growth remains below Canada's long-term average, which may increase the likelihood of interest rate cuts to stimulate domestic growth.

The long-term business confidence index in Canada, which tracks business expectations for the next 12 months, fell to 54.6 in January. This reflects a continued decline in manufacturers' confidence, primarily due to concerns over U.S. tariffs that may weaken Canada's export capabilities. The impact is particularly evident among small and medium-sized enterprises (SMEs) focused on exports, which have shown a significant decline in confidence. Similarly, import-reliant SMEs have also seen reduced confidence. The most affected sector remains retail, which heavily relies on imports and exports.

Canada's unemployment rate dropped to 6.6% in January from 6.7% in the previous month, easing concerns about a potential labor market slowdown, as predicted by the Bank of Canada. The number of unemployed persons remained unchanged at 1.5 million, while net employment increased by 76,000 positions during the period, bringing total employment to 20,993,000 jobs.

The addition of more than 76,000 jobs marked the sixth consecutive month of employment growth, following an increase of 91,000 jobs in the previous month and exceeding market expectations of 25,000 jobs. Most of the employment gains were driven by full-time positions, which rose by 35,000—marking the third consecutive monthly increase—while part-time jobs increased by 41,000, rebounding after a three-month slowdown. The majority of job gains occurred in the manufacturing sector, which added more than 33,000 jobs, and the technical sector, which saw an increase of 22,000 jobs.

Techical analysis data (5H)

Resistance: 1.4314, 1.4333, 1.4362

Source: Investing.com

Buy/Long 1: If the price touches support in the price range of 1.4237 - 1.4266 but cannot break the support at 1.4266, you may set a TP at approximately 1.4333 and SL at around 1.4218 or according to your acceptable risk.

Buy/Long 2: If the price breaks the resistance in the price range of 1.4314 - 1.4333, you may set a TP at approximately 1.4362 and SL at around 1.4237 or according to your acceptable risk.

Sell/Short 1: If the price touches resistance in the price range of 1.4314 - 1.4333 but cannot break the resistance at 1.4314, you may set a TP at approximately 1.4237 and SL at around 1.4362 or according to your acceptable risk.

Sell/Short 2: If the price breaks the support in the price range of 1.4237 - 1.4266, you may set a TP at approximately 1.4218 and SL at around 1.4333 or according to your acceptable risk.

Pivot point February 13, 2025 09:57 PM. GMT+7