FundamentalOverview

The USD got a bit of aboost on Monday following the better than expected US PMIs although the gains were not widespread. We’vealso seen some bids in the greenback yesterday following the weak US Consumer Confidence where inflation expectations jumpedto yet another high.

Overall, the market isstill pricing between two to three rate cuts this year and the sentimentremains tentative as we approach the Trump’s “Liberation Day” on April 2^nd.

On the CAD side, the Looniestrengthened yesterday following positive Trump’scomments where he said that Canada and Mexico “have stepped it up a lot”, potentiallysuggesting easier stance against the two main trading partners.

The Canadian Dollar’s faithis tied to the US tariffs plan that is going to be unveiled on Wednesday and wecould see a strong rally in case we get softer than expected rates.

USDCAD TechnicalAnalysis – 4 hour Timeframe

On the 4 hour chart, we can see that the price fell to the lower bound of the recent range between the 1.4250 support and the 1.4540 resistance. This is where we can expect the buyers to step in with a defined risk below the support to position for a move back into the 1.4380 level. The sellers, on the other hand, will want to see the price breaking lower to increase the bearish bets into the 1.4150 level next.

USDCAD TechnicalAnalysis – 1 hour Timeframe

On the 1 hour chart, we can see that we have a downward trendline now defining the bearish momentum. If we get a pullback into the trendline, we can expect the sellers to lean on it with a defined risk above it to position for the break below the support. The buyers, on the other hand, will look for a break higher to increase the bullish bets into the 1.4380 level. The red lines define the average daily range for today.

Upcoming Catalysts

Tomorrow we get the latest US Jobless Claimsfigures, while on Friday we conclude the week with the Canadian GDP and the USPCE report.