USDCAD Technical Analysis – The market focus switched towards the recession?



  • The BoC left interest rates at 5.00% as expected but remains prepared to
    raise rates further if needed.
  • BoC Governor Macklem delivered a less hawkish speech in
    the press conference compared to his previous remarks.
  • The recent Canadian CPI missed expectations across the
    board and the underlying inflation measures eased, which was a welcome
    development for the BoC.
  • On the labour market side, the latest report missed expectations
    across the board with negative figures in full-time employment and a slowing
    wage growth, which is going to be another positive outcome for the central
  • The market doesn’t expect the BoC to
    hike anymore.

USDCAD Technical Analysis –
Daily Timeframe

On the daily chart, we can see that USDCAD bounced
just before reaching the key trendline
around the 1.3630 level. The Canadian Dollar has been under some pressure probably
for the selloff in the Oil market. We are likely to see more rangebound price
action going forward as the market will try to find a new direction amid
weakening US and Canadian data. Watch out for breakouts as we have a key
trendline and a key resistance
at 1.3862.

USDCAD Technical Analysis –
4 hour Timeframe

On the 4 hour chart, we can see that there’s no
clear trend and therefore no clear level the market participants can lean on to.
After the yesterday’s spike following the miss in the US Jobless Claims data
though, we can expect a pullback. It’s also interesting to see that this time weaker
US data led to Dollar strength. The focus might be switching to the recession
and the US Dollar is generally supported as safe haven.

USDCAD Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see that the
buyers can lean on the upward minor trendline where we have also the confluence
with the 50% Fibonacci
level. Alternatively, if the price breaks the recent high, we
can expect the buyers to increase the bullish bets into the 1.3862 resistance.
The sellers, on the other hand, will want to see the price breaking below the
minor trendline to position for a drop into the major one at 1.3630.

Upcoming Events

Today the only economic report
on the agenda is the Canadian PPI which is unlikely to be market moving.

This article was written by FL Contributors at Source