USD/CAD is rising as traders await comments from Fed Chair Powell. The market is also looking forward to the US New Home Sales data for May, set to be released at 14:00 GMT, which will provide insights into the US housing market. Currently, the Canadian Dollar is weakening against the US Dollar, with USD/CAD hovering around 1.3750. This movement is influenced by the anticipated new home sales data and Powell’s upcoming testimony.

US New Home Sales

The US Census Bureau will report on New Home Sales for May, covering single-family homes. Analysts expect sales of 690,000 units, a significant drop from April’s 743,000 units. This increase in April was largely due to buying before tariff changes. Powell is set to speak to the US Senate about inflation and interest rates. His remarks are part of a semiannual Monetary Report, impacting the Federal Reserve’s future rate decisions. Technical analysis of USD/CAD shows it may be breaking out from a descending wedge pattern. The pair’s momentum remains neutral, facing resistance near the 50-day SMA at 1.3795. Possible targets include the April high of 1.4415 or the June low of 1.3539.

Fed Chair Powell Testimony

The Dollar is gaining strength against the Canadian Dollar as investors prepare for Powell’s remarks. His testimony is significant, especially with ongoing inflation concerns and pending rate decisions. While traders are watching for signals of change, it’s too early to assume major policy shifts. We are also monitoring the latest US housing data, which may influence the discussion. Sales are expected to cool slightly after last month’s surge, leaving traders to wonder if this indicates weakened domestic demand or just seasonal adjustments. April’s spike was largely seen as preemptive buying in response to anticipated cost changes, so it may not signal a long-term trend. For traders, USD/CAD is approaching a potential breakout, although not all indicators are positive. The price is near the 50-day average, showing momentum, but it’s not yet clear in which direction it will move. The April high remains a key target, while recent lows from early June could serve as support. A clear direction will depend on breaking through these outer levels or a notable increase in trading volume. The recently spotted wedge pattern has not yet moved fully, and Powell’s testimony could provoke a decisive shift. Currently, USD/CAD finds itself in a state of anticipation and caution, with traders hesitant until more information is available. Additionally, the CAD faces local challenges. Economic indicators in Canada show mixed results, and the Bank of Canada is unlikely to make any significant changes soon. This situation weakens the loonie against currencies backed by stronger monetary policies. In the coming sessions, be ready for increased trading activity during Powell’s speech and the new home sales report. These events often lead to volatility, especially if outcomes differ from forecasts. Traders should be prepared to act quickly if key support or resistance levels are breached, as the current technical setup is tightly aligned and may break in either direction. Focus on psychological levels, particularly recent highs. If USD/CAD closes above 1.3795 with strong participation, the case for further gains strengthens. Conversely, if the pair weakens, especially due to disappointing housing data or dovish indications from Washington, we might see tests of earlier summer ranges. In the next few sessions, clarity on policy direction and consumer strength will likely drive market movements, not just technical setups or isolated data points. Current patterns indicate building pressure—we could be approaching a pivotal moment. Create your live VT Markets account and start trading now.

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