USDCAD Technical Analysis – The bias remains bearish in the short term

<p>US</p><ul><li>The Fed <a href="https://www.forexlive.com/centralbank/federal-reserve-interest-rate-decision-no-change-20231101/">left interest rates unchanged</a> as
expected with basically no change to the statement.</li><li><a href="https://www.forexlive.com/centralbank/powell-opening-statement-the-committee-is-proceeding-carefully-20231101/">Fed Chair Powell</a> stressed
once again that they are proceeding carefully as the full effects of policy
tightening have yet to be felt.</li><li>The recent <a href="https://www.forexlive.com/news/us-september-pce-core-37-vs-37-expected-20231027/">US Core PCE</a> came
in line with expectations. </li><li>The <a href="https://www.forexlive.com/news/us-august-non-farm-payrolls-187k-vs-170k-expected-20230901/">labour market</a> is
starting to show some weakness as <a href="https://www.forexlive.com/news/us-weekly-initial-jobless-claims-217k-vs-210k-expected-20231102/">Continuing Claims</a> are now
rising at a fast pace and the <a href="https://www.forexlive.com/news/us-october-non-farm-payrolls-150k-vs-180k-expected-20231103/">NFP</a> data
last Friday missed across the board.</li><li>The <a href="https://www.forexlive.com/news/us-october-consumer-confidence-1026-vs-1000-expected-20231031/">US Consumer
Confidence</a> fell for the third consecutive month
although the data beat expectations.</li><li>The <a href="https://www.forexlive.com/news/us-september-ism-manufacturing-pmi-467-vs-490-expected-20231101/">US ISM
Manufacturing PMI</a> last week missed expectations by a big
margin, followed later on Friday with a disappointing <a href="https://www.forexlive.com/news/us-october-ism-services-518-vs-530-expected-20231103/">ISM Services PMI</a>,
although the index remained in expansion.</li><li>The market doesn’t expect the Fed to hike anymore.</li></ul><p>Canada</p><ul><li>The BoC <a href="https://www.forexlive.com/centralbank/bank-of-canada-decision-rates-held-unchanged-at-500-as-expected-20231025/">left interest rates at 5.00%</a> as expected but remains prepared to
raise rates further if needed.</li><li>BoC <a href="https://www.forexlive.com/centralbank/bocs-macklem-we-are-seeing-clear-evidence-that-higher-rates-are-working-20231025/">Governor Macklem</a> delivered a less hawkish speech in
the press conference compared to his previous remarks. </li><li>The recent <a href="https://www.forexlive.com/news/canada-september-cpi-38-versus-40-expected-20231017/">Canadian CPI</a> missed expectations across the
board and the underlying inflation measures eased, which was a welcome
development for the BoC. </li><li>On the <a href="https://www.forexlive.com/news/canada-october-employment-175k-vs-225k-expected-20231103/">labour market</a> side, the latest report missed expectations
across the board with negative figures in full-time employment and a slowing
wage growth, which is going to be another positive outcome for the central
bank.</li><li>The market doesn’t expect the BoC to
hike anymore.</li></ul><p>USDCAD Technical Analysis –
Daily Timeframe</p><p>On the daily chart, we can see that the USDCAD broke
decisively below the upward <a href="https://www.forexlive.com/Education/technical-analysis-trendlines-20220406/">trendline</a> and
extended the selloff following the disappointing NFP data. The pair bounced
yesterday on the 50% <a href="https://www.forexlive.com/Education/technical-analysis-using-fibonacci-retracements-20220421/">Fibonacci retracement</a> level
and it’s now approaching the broken trendline. Will we get a classic “break and
retest” pattern? From a risk management perspective, the buyers would have an
even better risk to reward setup around the major blue trendline. </p><p>USDCAD Technical Analysis –
4 hour Timeframe</p><p>On the 4 hour chart, we can see that the price is
now getting closer to a strong <a href="https://www.forexlive.com/Education/technical-analysis-support-and-resistance-20220405/">resistance</a> around
the 1.3740 level where we can find the 38.2% Fibonacci retracement level and
the red 21 <a href="https://www.forexlive.com/Education/technical-analysis-understanding-moving-averages-20220425/">moving average</a> for <a href="https://www.forexlive.com/Education/technical-analysis-confluence-20220318/">confluence</a>. This is
where the sellers are likely to step in again with a defined risk above
resistance to position for a drop into the major blue trendline. </p><p>USDCAD Technical Analysis –
1 hour Timeframe</p><p>On the 1 hour chart, we can see that the
current bullish momentum is defined by the upward minor trendline. More
conservative sellers may want to see the price breaking below the trendline
before piling in and position for a drop into the major trendline. The buyers,
on the other hand, will want to see the price breaking higher to increase the
bullish bets into the broken trendline where the sellers will go for another
try. </p><p>Upcoming Events</p><p><a href="https://www.forexlive.com/EconomicCalendar">This week</a> is pretty empty on the data front with just
the US Jobless Claims on Thursday and the University of Michigan Consumer
Sentiment on Friday. The market is likely to focus on the US Jobless Claims on
Thursday given the recent weakness in the labour market data. </p>

This article was written by FL Contributors at www.forexlive.com.