Fundamental
Overview
The USD continues to remain
under pressure amid positive risk sentiment and the imminent rate cuts from the
Fed which should help global growth. These are generally bearish drivers for
the greenback.
In fact, the recent
appreciation of the CAD has been mostly driven by the US Dollar side of the equation.
The Bank of Canada started its easing cycle before the Fed and the market
expects the central bank to continue to deliver rate cuts at each remaining
meeting for this year.
Today, we get the latest Canadian
CPI figures and although they shouldn’t change much in terms of market pricing,
the release might still move the CAD and provide opportunities to either fade
the reaction or go with it.
USDCAD
Technical Analysis – Daily Timeframe
USDCAD Daily
On the daily chart, we can
see that USDCAD dropped all the way back to the key support around the 1.36 handle. This is where we can
expect the buyers to step in with a defined risk below the support to position
for a rally back into the resistance at 1.3785. The sellers, on the other hand,
will want to see the price breaking lower to increase the bearish bets into the
1.35 handle next.
USDCAD Technical
Analysis – 4 hour Timeframe
USDCAD 4 hour
On the 4 hour chart, we can
see that from a risk management perspective, the sellers will have a better
risk to reward setup around the trendline
to position for a break below the support. The buyers, on the other hand, will
want to see the price breaking above the trendline to increase the bullish bets
into the 1.3785 resistance.
USDCAD Technical
Analysis – 1 hour Timeframe
USDCAD 1 hour
On the 1 hour chart, we can
see that we have another minor downward trendline defining the current bearish
momentum. The sellers will likely lean on it with a defined risk above it to
position for a break below the support, while the buyers will look for a break
to increase the bullish bets into the next trendline. The red lines define the average daily range for today.
Upcoming
Catalysts
Today we have the Canadian CPI report. On Thursday, we get the US Jobless
Claims figures and the US PMIs. On Friday we conclude with Fed Chair Powell
speaking at the Jackson Hole Symposium.