The US Dollar remains the
strongest currency but overall, we haven’t got much action in the past couple
of weeks due to the lack of key catalysts and the market’s pricing remaining
largely unchanged around roughly three rate cuts by the end of 2025.

During the Asian session,
we saw the greenback getting a bid as Trump said that he will charge Mexico and
Canada a 25% tariff on all products coming into the US and will charge China an
additional 10% tariff.

On the CAD side, we had the
Canadian CPI last 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 an 80% chance of a 25 bps cut and a total of 87 bps
of easing by the end of 2025 compared to 98 bps before the CPI report.

USDCAD
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that USDCAD spiked into the 1.4177 level overnight on the tariffs news. The
pair continues to trade above the 2-year highs with the buyers maintaining
control. The sellers will need to see the price falling back below the 1.3950
level to switch the bias to bearish and start targeting new lows.

USDCAD Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see that we have a minor support
around the 1.41 handle. This is where we can expect the buyers to step in to
position for further upside. The sellers, on the other hand, will look for a
break lower to target a drop back into the 1.40 handle.

USDCAD Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, there’s
nothing more we can add as we are now trading right at the support zone where
the buyers will look for a bounce, while the sellers will target a break. The
red lines define the average daily range for today.

Upcoming
Catalysts

Today we have the US Consumer Confidence report and the FOMC Meeting Minutes.
Tomorrow, we get the US PCE report and the latest US Jobless Claims figures. On
Friday, we conclude with the Canadian GDP.

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