The Canadian economy has slightly contracted.

The Canadian dollar has weakened by over 1.35 Canadian dollars per US dollar amid expectations that the Bank of Canada will cut interest rates this year, with forecasts indicating the first rate cut in the second quarter. Additionally, the Canadian dollar is facing pressure from foreign currency outflows, although it has received support from potentially rising oil prices due to OPEC+ production cuts.

The inflation rate in Canada decreased by 2.9% year-on-year in January, lower than the market's expectation of 3.3%, marking another decrease after a significant increase in December. The significant decrease in oil prices by over 4% has significantly slowed inflation for both land and air transportation. Additionally, food inflation slowed to 3.9% due to price declines in some grocery items.

Wholesale sales in Canada decreased by 0.6% month-on-month in January, reflecting declines in several sectors, notably construction materials and consumer goods. However, machinery and equipment related to production saw only a slight decrease in wholesale sales.

The Canadian government's budget deficit continued to increase, reaching 4.47 billion Canadian dollars in December, up from 1.98 billion Canadian dollars in the same month of the previous year. This increase is attributed to rapidly rising government expenditures, driven by economic stimulus efforts amid higher interest rates. Public debt expenses rose by over 35.6%, while government revenue increased by only 2.6%, primarily from growth in personal income tax and other taxes.

Retail sales in Canada decreased by 0.4% month-on-month in January, mainly due to increased household expenditures, leading to reduced spending. Sales of automotive parts and accessories decreased by 2.7%, while food and beverage stores increased by 1.5%, reflecting clear spending patterns focusing on essential factors.

New home prices in Canada decreased by 0.1% month-on-month in January, following stability in December. This decrease is attributed to price reductions and promotions aimed at attracting customers and increasing sales amid high interest rates. Construction cost issues remain a major concern due to increased construction material costs.

Techical analysis data (5H)

Resistance: 1.3597, 1.3614, 1.364

Source: Investing.com

Buy/Long 1: If the price touches support in the price range of 1.3528 - 1.3553 but cannot break the support at 1.3553, you may set a TP at approximately 1.3614 and SL at around 1.351 or according to your acceptable risk.

Buy/Long 2: If the price breaks the resistance in the price range of 1.3597 - 1.3614, you may set a TP at approximately 1.364 and SL at around 1.3528 or according to your acceptable risk.

Sell/Short 1: If the price touches resistance in the price range of 1.3597 - 1.3614 but cannot break the resistance at 1.3597, you may set a TP at approximately 1.3528 and SL at around 1.364 or according to your acceptable risk.

Sell/Short 2: If the price breaks the support in the price range of 1.3528 - 1.3553, you may set a TP at approximately 1.351 and SL at around 1.3614 or according to your acceptable risk.

Pivot point February 28, 2024 07:40 PM. GMT+7