USDCAD Technical Analysis – Compressing between key levels

USD

CAD

• 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 slowing wage
  growth, which is going to be another positive outcome for the central bank.
• The market doesn’t expect the BoC to
  hike anymore.

USDCAD Technical Analysis –
Daily Timeframe

On the daily chart, we can see that USDCAD is now
consolidating between the key 1.3860 resistance and the
major trendline. The
price action has been messy lately with no clear direction, so the market
participants might want to wait for the price to react to the key levels before
opening new positions.

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. The buyers are likely to wait for the price to come into the major
trendline to position for a rally into the 1.3860 resistance and target a break
above it. The sellers, on the other hand, will be both leaning on the
resistance and increase the bearish bets in case the price breaks below the
major trendline.

USDCAD Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see that on
this timeframe we have some interesting levels where the price reacted to
multiple times. In fact, we can expect more buyers to come into the market if
the price breaks above the 1.3750 resistance to target the key 1.3860 level. Conversely,
if the price breaks below the support around the 1.37 handle, the sellers are
likely to pile in to target the major trendline and increase the bearish bets
if the price falls below the trendline.

Upcoming Events

This week is pretty empty on the data front with the US
on holiday for Thanksgiving Day in the final part of the week. Today, we have
the Canadian CPI which is not expected to change much for the BoC given the
softening labour market, and then later in the day we will get the FOMC Meeting
Minutes. Tomorrow, we have the US Jobless Claims report which is probably going
to be the most important release of the week. On Friday, we conclude the week
with the latest US PMIs.