• The Fed left interest rates unchanged as
  expected at the last meeting and dropped the tightening bias in the statement.
• The US PCE came
  in line with expectations.
• The NFP report beat
  expectations on the headline number, but the unemployment rate and the average
  hourly earnings missed notably.
• The latest US ISM
  Manufacturing PMI missed expectations by a big margin
  remaining in contraction with the US ISM Services
  PMI
  following suit but holding on in expansion.
• The US Consumer
  Confidence missed expectations across the board.
• The market expects the first rate cut in June.

CAD

• The BoC left interest rates unchanged at
  5.00% as expected stating that further easing in underlying inflation is needed.
• The latest Canadian CPI missed expectations across the
  board with the underlying inflation measures falling.
• On the labour market side, the latest report beat
  expectations but we saw a fall in wage growth which is something that the BoC
  is watching closely.
• The Canadian PMIs improved in
  January although they remain both in contractionary territory.
• The market expects the first rate
  cut in June.

USDCAD Technical Analysis –
Daily Timeframe

On the daily chart, we can see that USDCAD broke
below the key trendline and
triggered a strong selloff as the sellers piled in to position for a drop into
the 1.3360 level. The pair recently pulled back into the moving averages from
overstretched levels and got rejected as the sellers stepped in again to target
the 1.3360 level with a better risk to reward setup.

USDCAD Technical Analysis –
4 hour Timeframe

On the 4 hour chart, we can see that we had a
strong resistance zone
around the 1.35 handle where we had also the confluence of the
50% Fibonacci retracement level
and the moving averages. This is where the sellers stepped in with a defined
risk above the Fibonacci level to position for a drop into the 1.3360 level.
The buyers, on the other hand, will need the price to break above the
resistance zone to start targeting the 1.36 handle.

USDCAD Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see more
closely the recent price action. We can notice that we have a key support
around the 1.3470 level. This is where the buyers are likely to step in with a
defined risk below the level to position for a break above the resistance with
a better risk to reward setup. 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 new lows.

Upcoming Events

Today we have the main event of the week, that is
the US CPI report. On Thursday we get the US PPI, the US Retail Sales and the
US Jobless Claims figures. On Friday, we conclude the week with the University
of Michigan Consumer Sentiment survey.

This article was written by FL Contributors at www.forexlive.com.