The pair remains within a sideways range, with the Canadian dollar occasionally showing a tendency to strengthen.
Recent DES data revealed that Canadian households have become more prosperous. In the fourth quarter of 2023, its “net” assets increased by 1.8%, or C$300 billion, softening the decline seen in the previous quarter.
This increase can be attributed to the recovery in financial market returns, as both stocks and bonds appreciated during the period. This dynamic offset the “modest” drop in the value of the country's real estate market. Overall, Canadians became C$712.7 billion richer in 2023 than the previous year.
Borrowing rates in the fourth quarter of last year rose for the second consecutive quarter, with households borrowing C$29.5 billion, primarily in mortgage loans, followed by consumer loans. These figures raise concern, as they suggest that some households may become more indebted than others. The credit debt of the Canadian economy is currently estimated at 2.9 trillion Canadian dollars, of which three-quarters are mortgage loans. However, in the economic context, household debt as a percentage of Canadians' disposable income represents 178.7% in the fourth quarter, slightly less than in the third quarter of last year and the lowest level since the end 2015. Thus, although there are debts, the The image is relatively stable.
USDCAD Technical Analysis
On the USDCAD H4 chart, a descending wave is forming towards 1.3403. Today we are considering the development of its fifth structure. After reaching the target level, a correction to 1.3511 is possible. Subsequently, we expect the beginning of a new descending structure towards the local target of 1.3354. This scenario is confirmed by the MACD indicator, whose signal line is below the zero mark and is heading strictly downwards towards new lows.
On the USDCAD H1 chart, the first structure of the fifth descending wave has completed. Today we are considering the possibility of a correction to 1.3488. After its completion, we expect a fall to 1.3454, then a rise to 1.3471 (testing from below) and then a fall to 1.3420. This is the first objective. The stochastic oscillator, with its signal line above 80 and preparing to fall to 20, also confirms this scenario.
By RoboForex Analysis Department
Disclaimer
Any forecast contained herein is based on the author's personal opinion. This analysis cannot be considered trading advice. RoboForex assumes no responsibility for trading results based on the trading recommendations and reviews contained herein.
