How I Built My July USD/CAD Bias Using June's Fundamental Data

July Fundamental Update :

As more July data is released, I update my macro bias instead of relying on a single news event.

Growth

ISM Manufacturing PMI: 53.3

ISM Services PMI: 54.0

Inflation

Average Hourly Earnings m/m: 0.3%

Employment

Non-Farm Payrolls: 57K

Unemployment Rate: 4.2%

🏦 Federal Reserve

Fed Chair speech: Data-dependent with a moderately hawkish tone.

No clear signal of an imminent rate cut or policy pivot.

July Summary (Current)

The first wave of July data suggests that the U.S. economy is still expanding, with both manufacturing and services remaining in expansion territory. Wage growth also remains stable, indicating that inflationary pressures have not completely disappeared.

However, the sharp slowdown in Non-Farm Payrolls (57K) is the first meaningful sign that the labor market is losing momentum. Although the unemployment rate improved to 4.2%, one weaker employment report alone is not enough to confirm a fundamental trend reversal.

My current view: The bullish USD outlook has weakened, but the fundamental trend has not yet changed. I will wait for the remaining July inflation data, retail sales, and further Fed communication before deciding whether this is a temporary slowdown or the beginning of a genuine macro trend shift.

Cool. That explains the consolidation phase of USDCAD

Cool. That explains the consolidation phase of USDCAD

July Fundamental Update :

As more July data is released, I update my macro bias instead of relying on a single news event.

Growth

ISM Manufacturing PMI: 53.3

ISM Services PMI: 54.0

Inflation

Average Hourly Earnings m/m: 0.3%

Employment

Non-Farm Payrolls: 57K

Unemployment Rate: 4.2%

🏦 Federal Reserve

Fed Chair speech: Data-dependent with a moderately hawkish tone.

No clear signal of an imminent rate cut or policy pivot.

July Summary (Current)

The first wave of July data suggests that the U.S. economy is still expanding, with both manufacturing and services remaining in expansion territory. Wage growth also remains stable, indicating that inflationary pressures have not completely disappeared.

However, the sharp slowdown in Non-Farm Payrolls (57K) is the first meaningful sign that the labor market is losing momentum. Although the unemployment rate improved to 4.2%, one weaker employment report alone is not enough to confirm a fundamental trend reversal.

My current view: The bullish USD outlook has weakened, but the fundamental trend has not yet changed. I will wait for the remaining July inflation data, retail sales, and further Fed communication before deciding whether this is a temporary slowdown or the beginning of a genuine macro trend shift.

Cool. That explains the consolidation phase of USDCAD

June → July Fundamental Update (USD/CAD)

This week's Canadian employment report completes the latest macro picture.

United States (July)

ISM Manufacturing PMI: 53.3

ISM Services PMI: 54.0

Average Hourly Earnings: 0.3%

Non-Farm Payrolls: 57K

Unemployment Rate: 4.2%

Fed communication: Moderately hawkish and data-dependent.

Canada (July)

Employment Change: 18.2K

Unemployment Rate: 6.5%

(Final Week Summary)

After comparing June's complete macro data with the latest July releases, my view has changed slightly but not enough to call a confirmed trend reversal.

The U.S. economy is still expanding, with both manufacturing and services remaining in expansion territory. The Fed also continues to maintain a relatively hawkish, data-dependent stance. However, the sharp slowdown in U.S. Non-Farm Payrolls (57K) is the first meaningful sign that the labor market is losing momentum.

On the Canadian side, the latest employment report remains encouraging. Employment increased by 18.2K, and the unemployment rate improved to 6.5%, showing that Canada's labor market continues to hold up after June's strong rebound.

Overall Assessment

🇺🇸 USD: Still fundamentally solid, but momentum is beginning to soften, mainly due to weaker job creation.

🇨🇦 CAD: Fundamentals continue to improve, with another positive employment report reinforcing June's recovery.

My Current Bias

The strong bullish USD/CAD bias from April is no longer present.

The gap between the U.S. and Canadian economies has narrowed further, but I still do not have enough evidence to declare a bearish USD/CAD macro trend.

My current stance is neutral with a slight bearish bias on USD/CAD, meaning I am watching closely for the next U.S. CPI, Canadian CPI, retail sales, and central bank communication. Those releases will determine whether this developing shift becomes a confirmed fundamental trend change or whether the USD regains its advantage.

Technically, on the D1, USDCAD is still bound within a bullish channel. Invalidation of that channel is what will confirm it's ready to go bearish for me.

Technically, on the D1, USDCAD is still bound within a bullish channel. Invalidation of that channel is what will confirm it's ready to go bearish for me.

The fundamental trend is weakening but not too strong, the us-iran cease fire that ended days ago will also help crude to go higher but now my worries is that it can keep inflation sticky, through high oil prices which will make supply drop while demand will increase, and then cost of getting fuel for transporting goods from one place to another may increase and this will only mean that consumers are now paying high for goods and services which can create a good inflation data and cause a more rate hike or a steady rate data, and that can cause the usdcad instead moving clearly will start ranging just like EU is doing because of what usdcad and dxy are both doing so am looking at a broad trend and possible outcome which the market can react to in a long time

Alright. I'll be sticking to technicals and watching the CPI and PMI impact on DXY this week. that will set the tone for next week trade bias.
Meanwhile, on the monthly, DXY is beginning to form a strong bearish candle. but that doesn't conclude it's monthly bias yet.

That's a solid approach. CPI should provide the catalyst, but I'd also watch whether DXY closes below key daily support. A bearish daily candle carries more weight if it's backed by weaker data and follow-through into the 4hr close.

June → Mid-July Fundamental Summary (USD/CAD)

🇺🇸 United States

Growth

GDP: 2.1%

ISM Manufacturing PMI: 53.3

ISM Services PMI: 54.0

The U.S. economy is still expanding, although the PMI data suggest growth is no longer accelerating as strongly as it was.

Inflation

Core CPI m/m: 0.0%

Core CPI y/y: 2.6%

CPI m/m: -0.4%

CPI y/y: 3.5%

Core PPI m/m: 0.2%

PPI m/m: -0.3%

Average Hourly Earnings: 0.3%

Both consumer and producer inflation softened. The negative monthly PPI reading is particularly important because it suggests pipeline price pressures eased, reinforcing the idea that inflation is cooling.

Employment

Non-Farm Payrolls: 57K

Unemployment Rate: 4.2%

Job creation slowed sharply, although the unemployment rate remained relatively low.

Federal Reserve

The recent Fed communication has remained data-dependent. Officials have not declared victory over inflation, but the softer CPI and PPI data increase the likelihood that future policy discussions could become less restrictive if the trend continues.

🇨🇦 Canada

Growth

GDP: 0.5%

Inflation

CPI m/m: 1.0%

Median CPI y/y: 2.1%

Trimmed CPI y/y: 2.0%

Employment

Employment Change: 18.2K

Unemployment Rate: 6.5%

Bank of Canada

Overnight Rate: 2.25% (unchanged).

The Bank of Canada left rates unchanged. With no surprise move, attention shifts to future guidance and incoming data rather than the rate decision itself.

🎯 Final Macro Verdict

Comparing June with the latest July releases, the balance has shifted.

The U.S. still has an expanding economy, but two important pillars—inflation and employment—have weakened compared with June. Softer CPI, softer PPI, and much weaker payroll growth all point to easing economic momentum.

Canada has not produced the same signs of deterioration. Growth recovered in June, employment remained positive in July, unemployment edged lower, and the Bank of Canada kept policy steady.

My Current Bias

USD: Moderately weakening from its June strength.

CAD: Stable to slightly strengthening.

Overall Assessment

I would now describe the fundamental picture as moderately bearish for USD/CAD, but not yet a fully confirmed long-term reversal.

The evidence is stronger than it was after the July jobs report alone because multiple U.S. indicators are now pointing in the same direction:

✅ Inflation is cooling.

✅ Producer prices have softened.

✅ Job creation has weakened.

Meanwhile, Canada has held onto its stronger labor market and stable inflation backdrop.

That means the bearish leg on USDCAD may not be long term right?

The long term will start soon what we are waiting for is cad bullish datas from next week then we can start selling usdcad on every retracement level knowing it will hold, so that's just it we just need cad inflation data that's all we need left , so that even if oil isn't backing it the fundamentals is strong and will keep it stronger than usd

Okay I get. I really admire the way you use fundamentals and technicals