Fundamental Overview
The US Dollar remains the strongest currency but overall, we haven’t got much action in the past couple of weeks due to the lack of key catalysts and the market’s pricing remaining largely unchanged around roughly three rate cuts by the end of 2025.
During the Asian session, we saw the greenback getting a bid as Trump said that he will charge Mexico and Canada a 25% tariff on all products coming into the US and will charge China an additional 10% tariff.
On the CAD side, we had the Canadian CPI last week and the data came in stronger than expected. This decreased the chances of a 50 bps cut in December with the market now seeing an 80% chance of a 25 bps cut and a total of 87 bps of easing by the end of 2025 compared to 98 bps before the CPI report.
USDCAD Technical Analysis – Daily Timeframe
On the daily chart, we can see that USDCAD spiked into the 1.4177 level overnight on the tariffs news. The pair continues to trade above the 2-year highs with the buyers maintaining control. The sellers will need to see the price falling back below the 1.3950 level to switch the bias to bearish and start targeting new lows.
USDCAD Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that we have a minor support around the 1.41 handle. This is where we can expect the buyers to step in to position for further upside. The sellers, on the other hand, will look for a break lower to target a drop back into the 1.40 handle.
USDCAD Technical Analysis – 1 hour Timeframe
On the 1 hour chart, there’s nothing more we can add as we are now trading right at the support zone where the buyers will look for a bounce, while the sellers will target a break. The red lines define the average daily range for today.
Upcoming Catalysts
Today we have the US Consumer Confidence report and the FOMC Meeting Minutes. Tomorrow, we get the US PCE report and the latest US Jobless Claims figures. On Friday, we conclude with the Canadian GDP.
