USDCAD Technical Evaluation – Rejection from a key resistance zone

USD

• The Fed left interest rates unchanged as anticipated on the final assembly with a shift in
  the assertion that indicated the top 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 charge cuts
  in 2024 in comparison with simply two within the final projection.
• Fed Chair Powell did not push again in opposition to the robust dovish pricing
  and even stated that they’re targeted on not making the error of holding charges
  excessive for too lengthy.
• The most recent US PCE missed expectations throughout the board with
  the Core 6-month annualised charge falling beneath the Fed’s goal at 1.9%.
• The NFP report beat
  expectations though there was extra weak spot underneath the hood.
• The most recent ISM Manufacturing PMI beat expectations, whereas the ISM Services PMI missed by a giant margin.
• The hawkish Fed members have been leaning
  on a extra impartial aspect these days.
• The market expects the Fed to begin reducing charges
  in Q1 2024.

CAD

• The BoC kept the interest rate steady at
  5.00% as anticipated on the final assembly with
  the same old caveat that it’s ready to lift the coverage charge additional if wanted.
• BoC Governor Macklem lately has been leaning on a extra
  impartial aspect and even began to speak about charge cuts though he stays
  unsure on the timing.
• The most recent 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 knowledge earlier than contemplating charge cuts.
• On the labour market aspect, the newest report missed
  expectations though wage development spiked to the best degree since 2021.
• 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 begin
  reducing charges in Q2 2024.

USDCAD Technical Evaluation –
Each day Timeframe

On the each day chart, we are able to see that USDCAD rallied
all the way in which again to the important thing trendline round
the 1.34 deal with the place we are able to additionally discover the confluence with the
pink 21 moving average and the
50% Fibonacci retracement degree.
That is the place the sellers are piling in with an outlined threat above the trendline
to place for a drop into new lows. The consumers, alternatively, will need
to see the worth breaking greater to invalidate the bearish setup and place
for a rally into the 1.36 deal with.

USDCAD Technical Evaluation –
4 hour Timeframe

On the 4 hour chart, we are able to see that the newest leg
greater into the trendline diverged with the
MACD, which
is mostly an indication of weakening momentum typically adopted by pullbacks or
reversals. On this case, it’s one other layer of confluence for the sellers and
will increase the possibilities of seeing one other drop from these ranges. If the worth
breaks beneath the upward counter-trendline, we are able to anticipate the sellers to
enhance their bearish bets into new lows.

USDCAD Technical Evaluation –
1 hour Timeframe

On the 1 hour chart, we are able to see extra
carefully the present worth motion with the pair now compressed between the
downward and upward trendlines. This provides us a transparent setup:

• A break above the 1.34 deal with ought to lead
  to a rally into the 1.36 deal with subsequent.
• A break beneath the downward trendline is
  more likely to set off a selloff into new lows.

Upcoming Occasions

This week is mainly empty on the information entrance with the
solely two notable releases scheduled for Thursday after we will get the US CPI
report and the US Jobless Claims figures, after which we conclude the week with
the US PPI knowledge on Friday.