Overview
The US Dollar’s bullish momentum is slowing down, even after unexpected increases in the US CPI and PPI. The market now reflects the Fed’s rate expectations, leaving little room for further aggressive cuts unless more strong US data comes in.
In the longer term, US yields are likely to rise, which should support the USD’s recent uptrend. More positive catalysts could further strengthen the Dollar.
Key events in November include the US election and the release of October data.
For the Canadian Dollar (CAD), there’s a 48% chance of a 50 bps rate cut in the next meeting. Today’s Canadian CPI report will be crucial; weak results may confirm the cut, while strong results could boost the CAD.
USDCAD Technical Analysis – Daily
USDCAD is currently above resistance at 1.3785. Sellers are aiming to push it back below this level, while buyers expect more upside towards 1.3860.
USDCAD Technical Analysis – 4 Hour
The 4-hour chart shows a strong rally with no pullback, indicating a steep upward trendline. Buyers will likely continue to support this trend, while sellers are keen on a break lower towards 1.36.
USDCAD Technical Analysis – 1 Hour
On the 1-hour chart, the steep trendline is evident. Buyers are likely to maintain support at this line, while sellers are watching for a potential break. Today’s Canadian CPI could lead to a relief rally for the CAD if results exceed expectations.
Upcoming Events
This week lacks major data releases, but today’s Canadian CPI is key. Later, Thursday will feature US Retail Sales and Jobless Claims reports.
