On the daily chart below, we can see a possible descending triangle with the base at 1.3225. The price can break out on either side, so the fundamentals will help with deciding which way to go. As can be seen in other major pairs, there’s a lot of uncertainty in the market causing some ranging price action.

On one hand we have those that see inflation falling with the global economy remaining resilient and then returning to growth with future rate cuts, on the other hand we have those that see inflation remaining above the central bank target requiring more tightening and eventually guaranteed hard landing.

Only time and economic data will tell who’s right here.

USD/CAD

On the 4 hour chart below, we can see the price trading in a range between the resistance in the 1.3450 area and the support in the 1.3350 zone. After the blockbuster NFP report the price rallied towards the resistance and then fell again towards support.

The CPI report today will decide the next move: a beat to the expectations should drive the price back up towards resistance and possibly higher, on the other hand a miss should give a break lower and a fall towards the triangle base at 1.3225.

USDCAD

On the 1 hour chart below, the price is currently trading right at the support and we can also see a divergence with the MACD. This signals a weakening selling momentum and generally a pullback or reversal to follow.

From a risk management perspective though, it would be better to wait for the CPI report before taking trading positions because such strong fundamental catalysts can invalidate easily any good technical setup. Being prepared for the possible outcomes is key and the levels are defined.

USDCAD