US

• The Fed left interest rates unchanged as expected at the last meeting.
• The macroeconomic projections were revised higher,
  and the Dot Plot showed that the FOMC still expects another rate hike by the
  end of the year with less rate cuts projected in 2024.
• Fed Chair Powell reaffirmed their data dependency but added that
  they will proceed carefully.
• The recent US CPI beat expectations on the headline
  figures, but the core measures came in line with forecasts and the market’s
  pricing barely changed.
• The labour market remains pretty resilient but there are some signs
  of softness as seen yesterday with another miss in Continuing Claims.
• The US Retail Sales last week beat expectations by a big
  margin with positive revisions to the prior figures, suggesting the consumers’
  spending is still solid.
• The US PMIs this week showed that the economy now
  looks more balanced and resilient.
• Fed Chair Powelland other FOMC members continue to highlight the rise in long term yields as doing
  the job for the Fed and therefore they are expected to keep rates steady in
  November as well.
• The market doesn’t expect the Fed to hike anymore.

Canada

• The BoC left interest rates at 5.00% as expected but remains prepared to
  raise rates further if needed.
• BoC Governor Macklem delivered a less hawkish speech in
  the press conference compared to his previous remarks.
• The Canadian CPI last week missed across the board
  and the underlying inflation measures eased, which was a welcome development
  for the BoC.
• On the labour market side, the last
  report beat expectations and showed another uptick in wage growth, which is something that Governor
  Macklem said the BoC is watching carefully.
• The market doesn’t expect the BoC to
  hike anymore.

USDCAD Technical Analysis –
Daily Timeframe

On the daily chart, we can see that the USDCAD pair
has almost reached the 1.3862 high following the negative risk sentiment that
favoured the USD and the less hawkish BoC that weakened the CAD. We can notice
that the pair has been diverging with the
MACD trading
into the high, which is a sign of a weakening momentum, and the price is now a
bit overstretched as depicted by the distance from the blue 8 moving average. This is
where we can expect the sellers to step in with a defined risk above the high
to position for a pullback into the upward trendline.

USDCAD Technical Analysis –
4 hour Timeframe

On the 4 hour chart, we can see that from a risk
management perspective, the buyers will have a much better risk to reward setup
around the 1.3750 level where we can find the upward trendline and the Fibonacci retracement levels
for confluence. The
sellers, on the other hand, will want to see the price breaking lower to
invalidate the bullish setup and increase the bearish bets into the major
trendline around the 1.36 handle.

USDCAD Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see that the
price is indeed starting to lose momentum as the moving averages crossed to the
downside. If the price makes one last rally into the 1.3862, the sellers will
have a much better risk to reward setup and will pile in with more conviction.
Alternatively, we can expect them to increase the bearish momentum into the
trendline if the price breaks below the recent swing low around the 1.3790
level.

Upcoming Events

Todaywe will get the US PCE report which is unlikely
to change anything for the Fed at this point in time.

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