USDCAD Technical Analysis – Time for a pullback? | Forexlive

USD

CAD

The BoC left interest rates unchanged at
5.00% as expected stating that further easing in underlying inflation is needed.
The latest Canadian CPI missed expectations across the
board with the underlying inflation measures falling.
On the labour market side, the latest report beat
expectations but we saw a contraction in full-time employment and a fall in
wage growth.
The Canadian PMIs improved in
January although they remain both in contractionary territory.
The market expects the first rate
cut in June.

USDCAD Technical Analysis –
Daily Timeframe

USDCAD Daily

On the daily chart, we can see that USDCAD broke
below the key trendline and
triggered a strong selloff as the sellers piled in to position for a drop into
the 1.3360 level. That’s also where we should find the buyers stepping in to
position for a rally back to the highs with a better risk to reward setup.

USDCAD Technical Analysis –
4 hour Timeframe

USDCAD 4 hour

On the 4 hour chart, we can see that we have a
clear swing level around at the 1.3442 level where we might see a bounce with
the buyers stepping in with a defined risk below the level to position for a
rally back to the highs. The sellers, on the other hand, might want to wait for
the price to pull back into the 38.2% Fibonacci retracement level to
position for new lows with a better risk to reward setup.

USDCAD Technical Analysis –
1 hour Timeframe

USDCAD 1 hour

On the 1 hour chart, we can see that the latest
leg lower diverged with
the MACD which
is generally a sign of weakening momentum often followed by pullbacks or
reversals. In this case, it might be a signal for a pullback into the resistance around
the 1.35 handle.