USDCAD Technical Evaluation – Pullback or reversal?

USD

• The Fed left interest rates unchanged as anticipated on the final assembly with a shift in
  the assertion that indicated the tip of the tightening cycle.
• The Abstract of Financial Projections confirmed a
  downward revision to Progress and Core PCE in 2024 whereas the Unemployment Price
  was left unchanged. Furthermore, the Dot Plot was revised to indicate three fee cuts
  in 2024 in comparison with simply two within the final projection.
• Fed Chair Powell did not push again in opposition to the sturdy dovish pricing
  and even stated that they’re centered on not making the error of holding charges
  excessive for too lengthy.
• The newest US PCE missed expectations throughout the board with
  the Core 6-month annualised fee falling beneath the Fed’s goal at 1.9%.
• The labour market has been softening by way of much less job
  alternatives somewhat than extra layoffs with the Initial Claims hovering round cycle lows and Persevering with Claims
  remaining excessive.
• The newest ISM Manufacturing PMI missed expectations falling additional into
  contraction, whereas the ISM Services PMI beat forecasts holding on in growth.
• The market expects the Fed to start out reducing charges
  in Q1 2024.

CAD

• The BoC kept the interest rate steady at
  5.00% as anticipated on the final assembly with
  the standard caveat that it’s ready to boost the coverage fee additional if wanted.
• BoC Governor Macklem not too long ago has been leaning on a extra
  impartial facet and even began to speak about fee cuts though he stays
  unsure on the timing.
• The newest Canadian CPI beat expectations throughout the board with
  the underlying inflation measures remaining elevated, which ought to give the BoC
  a purpose to attend for extra information earlier than contemplating fee cuts.
• On the labour market facet, the newest report beat expectations
  though the unemployment fee ticked larger once more.
• The Canadian PMIs proceed to fall
  additional into contraction because the economic system retains on weakening amid restrictive
  financial coverage.
• The market expects the BoC to start out
  reducing charges in Q2 2024.

USDCAD Technical Evaluation –
Each day Timeframe

On the every day chart, we will see that USDCAD bounced
on the 1.32 deal with and began to right larger after an aggressive selloff in
the previous few weeks. We are able to see that now we have an excellent resistance zone
across the 1.3382 stage the place we will additionally discover the confluence with the
50% Fibonacci retracement stage
and the purple 21 moving average. That is
the place we will count on the sellers to step in once more to focus on a brand new low.

USDCAD Technical Evaluation –
4 hour Timeframe

On the 4 hour chart, we will see that the newest leg
decrease diverged with the
MACD which is
typically an indication of weakening momentum typically adopted by pullbacks or
reversals. On this case, the goal for the pullback ought to come proper round
the resistance zone the place we will count on the sellers to start out piling in. If the
worth breaks above the resistance zone, the bearish setup can be invalidated,
and the consumers will doubtless enhance the bullish bets to start out concentrating on the
1.36 deal with.

USDCAD Technical
Evaluation – 1 hour Timeframe

On the 1 hour chart, we will see that from
a danger administration perspective, late consumers may wish to look ahead to a pullback
into the 1.3270 stage the place we will discover the confluence of the latest swing
excessive, the 50% Fibonacci retracement stage and the 4-hour 21 transferring common.

Upcoming Occasions

This week is filled with key financial information which is able to
culminate with the NFP report on Friday. We start at the moment with the US ISM
Manufacturing PMI and Job Openings and given the latest developments there might be
room for disappointment. Later within the day, we’ll get the discharge of the FOMC
Minutes, but it surely’s not anticipated to be market-moving on condition that it’s three weeks
previous information. Tomorrow, we may have one other slate of US labour market information with
the discharge of the US ADP and Jobless Claims figures. Lastly, on Friday, we
conclude the week with the Canadian Jobs information, the NFP report and the ISM
Companies PMI.