The USD remains under
pressure amid the aggressive market pricing for rate cuts and better global
growth expectations following the recent huge Chinese easing measures. It’s now
a battle between global growth supporting the risk sentiment and weighing on
the greenback and the aggressive rates pricing which could be scaled back if
the US data starts to pick up.

On the CAD side, the latest
soft Canadian CPI raised the probabilities for a 50
bps cut at the upcoming meeting as BoC’s Macklem hinted to a possibility of
delivering larger cuts in case growth and inflation were to weaken more than
expected. The market sees a 47% probability for such a move.

USDCAD
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that USDCAD dropped all the way back to the recent lows around the 1.3420
level. This is where the buyers stepped in to position for a rally back into
the 1.36 resistance.
The sellers, on the other hand, will want to see the price breaking lower to
increase the bearish bets into the 1.32 handle next.

USDCAD Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see that the price broke above the downward trendline today and stalled at the resistance
zone around the 1.35 handle. The buyers will want to see the price breaking higher
to increase the bullish bets into the 1.36 resistance, while the sellers will
likely step in around these levels to target a break below the 1.3420 level.

USDCAD Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, there’s
not much else to add but a drop below the most recent higher low at 1.3455
would likely see the bearish momentum increasing. The red lines define the average daily range for today.

Upcoming
Catalysts

Today we conclude the week with the Canadian GDP and the US PCE.

This article was written by Giuseppe Dellamotta at www.forexlive.com.