USD

  • The Fed left interest rates unchanged as expected 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 last week.
  • The US ISM Manufacturing PMI beat expectations by a big margin with the prices component continuing to increase.
  • The US Consumer Confidence missed expectations although the labour market details improved.
  • The market now sees basically a 50/50 chance of a 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

USDCAD Technical Analysis
USDCAD Daily

On the daily chart, we can see that USDCAD bounced recently around the red 21 moving average and it’s now looking again to the 1.3620 resistance. That’s where we can expect the sellers to step in with a defined risk above the 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 increase the bullish bets into the upper bound of the channel.

USDCAD Technical Analysis – 4 hour Timeframe

USDCAD Technical Analysis
USDCAD 4 hour

On the 4 hour chart, we can see that the price has been stuck in a range between the 1.3450 support and the 1.3620 resistance although the pair continued to print higher lows indicating a bullish bias. There’s not much else to glean from this chart, so we need to zoom in to see some more details.

USDCAD Technical Analysis – 1 hour Timeframe

USDCAD Technical Analysis
USDCAD 1 hour

On the 1 hour chart, we can see that the price recently broke an important zone around the 1.3560 level where we can find the confluence of the 38.2% Fibonacci retracement level and the red 21 moving average. This is where we can expect the buyers to step in with a defined risk below the zone to position for a break above the 1.3620 resistance. The sellers, on the other hand, will want to see the price breaking lower to position for a drop into the lower bound of the channel.

Upcoming Events

Today we have the US Job Openings and tomorrow the US ADP and the US ISM Services PMI. On Thursday, we get the latest US Jobless Claims figures while on Friday we conclude with the Canadian Jobs data and the US NFP report.