USDCAD Technical Analysis – Watch these levels for the next direction

<p>US:</p><ul><li>The Fed <a href="https://www.forexlive.com/centralbank/the-fomc-keeps-the-target-fed-funds-range-at-525-to-550-20230920/">left interest rates unchanged</a> as expected at the last meeting.</li><li>The macroeconomic projections were revised higher,
and the Dot Plot showed that the FOMC still expects another rate hike by the
end of the year with less rate cuts projected in 2024.</li><li><a href="https://www.forexlive.com/centralbank/highlights-from-the-fed-chair-powells-press-conference-after-september-rate-decision-20230920/">Fed Chair Powell</a> reaffirmed their data dependency but added that
they will proceed carefully. </li><li>The <a href="https://www.forexlive.com/news/us-september-cpi-37-yy-versus-36-yy-expected-20231012/">US CPI</a> beat expectations on the headline
figures, but the core measures came in line with forecasts and the market’s
pricing barely changed. </li><li>The <a href="https://www.forexlive.com/news/us-august-non-farm-payrolls-187k-vs-170k-expected-20230901/">labour market</a> remains pretty resilient as seen once again last
week with the beat in<a href="https://www.forexlive.com/news/us-weekly-initial-jobs-claims-198k-versus-212k-expected-20231019/">Jobless Claims</a>, although continuing claims missed for a second
time in a row. </li><li>The <a href="https://www.forexlive.com/news/us-september-retail-sales-07-versus-03-expected-20231017/">US Retail Sales</a> last week beat expectations by a big
margin with positive revisions to the prior figures, suggesting the consumers’
spending remains resilient.</li><li><a href="https://www.forexlive.com/centralbank/feds-powell-fomc-is-proceeding-carefully-20231019/">Fed Chair Powell</a>and other FOMC members continue to highlight the rise in long term yields as doing
the job for the Fed and therefore they are expected to keep rates steady in
November as well.</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-holds-rates-at-500-as-expected-20230906/">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-not-expecting-a-recession-20231013/">Governor Macklem</a> delivered a hawkish speech which
points to another rate hike if the underlying inflation data remains elevated. </li><li>The <a href="https://www.forexlive.com/news/canada-september-cpi-38-versus-40-expected-20231017/">Canadian CPI</a> last week missed across the board
and the underlying inflation measures eased, which decreased the risk of
another rate hike from the BoC. </li><li>On the labour market side, the recent
report beat expectations and showed another uptick in <a href="https://www.forexlive.com/news/canada-september-employment-638-vs-200k-expected-20231006/">wage growth</a>, which is something that Governor
Macklem said the BoC is watching carefully.</li><li>The market doesn’t expect the BoC to
hike at the upcoming meeting.</li></ul><p>USDCAD Technical Analysis –
Daily Timeframe</p><p>On the daily chart, we can see that the USDCAD pair
maintains a bullish bias although the recent correction became harder to
interpret. The buyers are likely to lean on the red 21 <a href="https://www.forexlive.com/Education/technical-analysis-understanding-moving-averages-20220425/">moving average</a> and keep
targeting the 1.3862 high, but from a risk management perspective, they will
have an even better setup if the price was to pull back all the way down to the
<a href="https://www.forexlive.com/Education/technical-analysis-trendlines-20220406/">trendline</a>. </p><p>USDCAD Technical Analysis –
4 hour Timeframe</p><p>On the 4 hour chart, we can see that the USDCAD
pair is trading within a rising channel and the price is near the lower bound
of the channel. This is where we have a strong <a href="https://www.forexlive.com/Education/technical-analysis-confluence-20220318/">confluence</a> with the
61.8% <a href="https://www.forexlive.com/Education/technical-analysis-using-fibonacci-retracements-20220421/">Fibonacci retracement</a> level,
the lower bound of the channel and the daily red 21 moving average. The buyers
should step in here with a defined risk below the channel to position for a
rally into the 1.3862 high. The sellers, on the other hand, will want to see
the price breaking lower to pile in and target the major trendline. </p><p>USDCAD Technical Analysis –
1 hour Timeframe</p><p>On the 1 hour chart, we can see more
closely the bullish setup around the 1.3660 level. The price has bounced on the
61.8% Fibonacci retracement level as the buyers stepped in. A break above the
recent swing low level around the 1.37 handle is likely to trigger a stronger
move to the upside as the buyers will increase the bullish bets. </p><p>Upcoming Events</p><p><a href="https://www.forexlive.com/EconomicCalendar">Today</a> we will get the latest US PMIs where strong
figures should support the greenback, while weak readings are a bit more
complicated as the USD might weaken due to falling Treasury yields but also
strengthen due to recessionary fears. On Thursday, we will see the US Jobless
Claims figures, while on Friday we get the US PCE report which is not expected
to change anything for the Fed at this time. </p>

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