Fundamental
Overview
The US Dollar continues to
consolidate despite the higher-than-expected inflation figures and a less
dovish Powell last week. The market’s pricing remained largely unchanged at
three rate cuts by the end of 2025.
This is generally a signal
that the market is fine with the current pricing, and we would need stronger
reasons to price out the remaining rate cuts. This could lead to some general
US Dollar weakness in the short term.
On the CAD side, we had the
Canadian
CPI this week and the data came in stronger than expected. This decreased
the chances of a 50 bps cut in December with the market now seeing 90 bps of
easing by the end of 2025 compared to 98 bps before the CPI report.
USDCAD
Technical Analysis – Daily Timeframe
USDCAD Daily
On the daily chart, we can
see that USDCAD pulled back into a key support
zone around the 1.3960 level where we can also find the major trendline
for confluence.
This is where the buyers will likely step in with a defined risk below the
support to position for a rally into new highs. The sellers, on the other hand,
will want to see the price breaking lower to increase the bearish bets into the
1.3818 level next.
USDCAD Technical
Analysis – 4 hour Timeframe
USDCAD 4 hour
On the 4 hour chart, we can
see more clearly the support zone around the 1.3960 level. There’s not much
else we can add here as the buyers will look for a bounce and a rally into new
highs, while the sellers will look for a break lower to increase the bearish
bets into the 1.3818 level.
USDCAD Technical
Analysis – 1 hour Timeframe
USDCAD 1 hour
On the 1 hour chart, there’s
nothing more we can add as we are now trading right at the support zone and we
will see in the next days who’s going to prevail. The red lines define the average daily range for today.
Upcoming
Catalysts
Today we get the latest US Jobless Claims figures, while tomorrow we conclude
the week with the US PMIs.