Fundamental
Overview
The USD has come under
strong pressure recently as the weaker US data finally triggered a deeper
pullback in the greenback from the stretched long positions accumulated in the
past two quarters. The market pricing switched pretty fast from expecting just
one cut a couple of weeks ago to three now.
The main event this week is
the US CPI report. Higher than expected data will likely give the greenback a
boost in the short term as markets pare back their rate cuts expectations.
Conversely, a soft report could see more weakness for the US Dollar ahead of
the FOMC decision next week.
On the CAD side, the negative
sentiment and the tariffs risk isn’t helping the Loonie as it continues to
underperform with the markets now expecting a rate cut at this week’s BoC decision due the potential hit to the Canadian economy.
USDCAD
Technical Analysis – Daily Timeframe
USDCAD Daily
On the daily chart, we can
see that USDCAD continues to mostly range between the 1.42 and 1.45 levels as
the uncertainty around tariffs remains high. There’s not much we can glean from
this timeframe, so we need to zoom in to see some more details.
USDCAD Technical
Analysis – 4 hour Timeframe
USDCAD Daily
On the 4 hour chart, we can
see that the price recently broke below the upward trendline and extended the drop into
the 1.4245 level before bouncing off of it and rallying back above the key
1.4374 level. The price action remains choppy and the market is at the mercy of
the tariffs headlines.
USDCAD Technical
Analysis – 1 hour Timeframe
USDCAD 1 hour
On the 1 hour chart, we can
see that we have a minor upward trendline defining the bullish momentum on this
timeframe. The buyers will likely step in around these levels with a defined
risk below the trendline to position for further upside. The sellers, on the
other hand, will look for a break below the trendline to pile in for a drop
back into the 1.4245 level next. The red lines define the average daily range for today.
Upcoming Catalysts
Today we have the NYFed Consumer Inflation
Expectations. Tomorrow, we get the US Job Openings data. On Wednesday, we have
the US CPI report and the BoC Rate Decision. On Thursday, we get the US PPI
data and the US Jobless Claims figures. On Friday, we conclude the week with
the University of Michigan Consumer Sentiment report.