USDCAD Technical Analysis – The market focus switched towards the recession?

<p>USD</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-october-core-cpi-40-yy-versus-41-yy-expected-20231114/">US
CPI</a> missed expectations across the board bringing the expectations for rate
cuts forward. </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 weakness as <a href="https://www.forexlive.com/news/us-initial-jobless-claims-231k-vs-220k-estimate-20231116/">Continuing Claims</a> are now
rising at a fast pace and the recent <a href="https://www.forexlive.com/news/us-october-non-farm-payrolls-150k-vs-180k-expected-20231103/">NFP</a> report
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> and <a href="https://www.forexlive.com/news/us-november-prelim-umich-consumer-sentiment-604-vs-637-expected-20231110/">University of
Michigan Consumer Sentiment</a> continue to fall.</li><li>The recent <a href="https://www.forexlive.com/news/us-september-ism-manufacturing-pmi-467-vs-490-expected-20231101/">US ISM
Manufacturing PMI</a> missed expectations by a big margin,
followed by a disappointing <a href="https://www.forexlive.com/news/us-october-ism-services-518-vs-530-expected-20231103/">ISM Services PMI</a>,
although the latter remained in expansion.</li><li>The <a href="https://www.forexlive.com/news/us-october-retail-sales-01-vs-03-expected-20231115/">US
Retail Sales</a> beat expectations, while the <a href="https://www.forexlive.com/news/us-october-ppi-13-versus-19-expected-20231115/">US
PPI</a> missed forecasts by a big margin. </li><li>The recent Fedspeak has been leaning on
the hawkish side, but this week’s inflation report pretty much confirmed that
the Fed might be done for the cycle. </li><li>The <a href="https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html">market</a> doesn’t
expect the Fed to hike anymore.</li></ul><p>CAD</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 USDCAD bounced
just before reaching the key <a href="https://www.forexlive.com/Education/technical-analysis-trendlines-20220406/">trendline</a>
around the 1.3630 level. The Canadian Dollar has been under some pressure probably
for the selloff in the Oil market. We are likely to see more rangebound price
action going forward as the market will try to find a new direction amid
weakening US and Canadian data. Watch out for breakouts as we have a key
trendline and a key <a href="https://www.forexlive.com/Education/technical-analysis-support-and-resistance-20220405/">resistance</a>
at 1.3862.</p><p>USDCAD Technical Analysis –
4 hour Timeframe</p><p>On the 4 hour chart, we can see that there’s no
clear trend and therefore no clear level the market participants can lean on to.
After the yesterday’s spike following the miss in the US Jobless Claims data
though, we can expect a pullback. It’s also interesting to see that this time weaker
US data led to Dollar strength. The focus might be switching to the recession
and the US Dollar is generally supported as safe haven.</p><p>USDCAD Technical Analysis –
1 hour Timeframe</p><p>On the 1 hour chart, we can see that the
buyers can lean on the upward minor trendline where we have also the <a href="https://www.forexlive.com/Education/technical-analysis-confluence-20220318/">confluence</a>
with the 50% <a href="https://www.forexlive.com/Education/technical-analysis-using-fibonacci-retracements-20220421/">Fibonacci
retracement</a> level. Alternatively, if the price breaks the recent high, we
can expect the buyers to increase the bullish bets into the 1.3862 resistance.
The sellers, on the other hand, will want to see the price breaking below the
minor trendline to position for a drop into the major one at 1.3630.</p><p>Upcoming Events</p><p><a href="https://www.forexlive.com/EconomicCalendar">Today</a> the only economic report
on the agenda is the Canadian PPI which is unlikely to be market moving. </p>

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