FundamentalOverview

The US Dollar continues toconsolidate despite the higher-than-expected inflation figures and a lessdovish Powell last week. The market’s pricing remained largely unchanged atthree rate cuts by the end of 2025.

This is generally a signalthat the market is fine with the current pricing, and we would need strongerreasons to price out the remaining rate cuts. This could lead to some generalUS Dollar weakness in the short term.

On the CAD side, we had theCanadianCPI this week and the data came in stronger than expected. This decreasedthe chances of a 50 bps cut in December with the market now seeing 90 bps ofeasing by the end of 2025 compared to 98 bps before the CPI report.

USDCADTechnical Analysis – Daily Timeframe

On the daily chart, we cansee that USDCAD pulled back into a key supportzone around the 1.3960 level where we can also find the major trendlinefor confluence.This is where the buyers will likely step in with a defined risk below thesupport to position for a rally into new highs. The sellers, on the other hand,will want to see the price breaking lower to increase the bearish bets into the1.3818 level next.

USDCAD TechnicalAnalysis – 4 hour Timeframe

On the 4 hour chart, we cansee more clearly the support zone around the 1.3960 level. There’s not muchelse we can add here as the buyers will look for a bounce and a rally into newhighs, while the sellers will look for a break lower to increase the bearishbets into the 1.3818 level.

USDCAD TechnicalAnalysis – 1 hour Timeframe

On the 1 hour chart, there’snothing more we can add as we are now trading right at the support zone and wewill see in the next days who’s going to prevail. The red lines define the average daily range for today.

UpcomingCatalysts

Today we get the latest US Jobless Claims figures, while tomorrow we concludethe week with the US PMIs.