USD
- The Fed left interest rates unchanged as expected at the last meeting with basically no change to the statement. The Dot Plot still showed three rate cuts for 2024 and the economic projections were upgraded with growth and inflation higher and the unemployment rate lower.
- Fed Chair Powell maintained a neutral stance as he said that it was premature to react to the recent inflation data given possible bumps on the way to their 2% target.
- The US CPI and the US PPI beat expectations for the second consecutive month.
- The US Jobless Claims beat expectations.
- The latest US Manufacturing PMI beat expectations while the Services PMI missed slightly. Both the measures remain in expansion though.
- The US Consumer Confidence missed expectations although the labour market details improved.
- The market expects the first rate cut in June.
CAD
- The BoC left interest rates unchanged at 5.00% as expected at the last meeting stating that further easing in underlying inflation is needed.
- The latest Canadian CPI missed expectations across the board with the underlying inflation measures falling.
- On the labour market side, the latest report beat expectations but we saw a fall in wage growth which is something that the BoC is watching closely.
- The Canadian PMIs improved in February although they remain both in contractionary territory.
- The market expects the first rate cut in June.
USDCAD Technical Analysis – Daily Timeframe
On the daily chart, we can see that USDCAD got rejected once again from the key 1.3620 resistance. We can notice that the pair is trading inside a rising channel and the target for the sellers should be the lower bound of the channel. The buyers, on the other hand, will have a much better risk to reward setup around the bottom trendline to position for a rally into the 1.38 handle.
USDCAD Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that the price pulled back from the selloff into the blue 8 moving average where we can also find the 38.2% Fibonacci retracement level for confluence. This is where we can expect the sellers to step in with a defined risk above the Fibonacci level to position for a drop into the lower bound of the channel. The buyers, on the other hand, will want to see the price breaking higher to position for a rally into the 1.3620 resistance targeting a break above it.
USDCAD Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see more closely the bearish setup with the minor resistance zone around the 1.3560 level. If the price were to break further below the black counter-trendline, we can expect the sellers to increase the bearish bets into the lower bound of the channel.
Upcoming Events
Today we conclude the week with the US PCE and Fed Chair Powell.
