USDCAD Technical Analysis – We are trading in a tight range

Fundamental Overview

The USD has been stronger since last Friday as Trump floated reciprocal tariffs. That came after a good US NFP report where the data was mixed at best but still pointing to strength. The jump in average hourly earnings caught the eye but that might have been distorted by the drop in average weekly hours.

We’ve also got another jump in inflation expectations in the University of Michigan Consumer Sentiment survey showing that the tariffs news is the main culprit of the recent surge in expectations.

The focus now switched to the US CPI report tomorrow where Core inflation is expected to tick lower which would be a welcome news. A lower than expected print should see the US Dollar losing ground across the board once again, while a hot reading might boost the greenback for the rest of the week.

On the CAD side, the Canadian Employment report last Friday beat expectations by a big margin once again as things are starting to slowly improve for Canada. The Loonie has been held back only by the tariffs news as they can impact negatively global growth on potential trade wars. When those fears ease, the CAD gets the green light to appreciate.

USDCAD Technical Analysis – Daily Timeframe

On the daily chart, we can see that USDCAD bounced from the key support around the 1.4280 level. The buyers stepped in there to position for a rally back into the 1.4470 resistance next. The sellers will want to see the price breaking below the key support to gain more conviction and extend the drop into the 1.40 handle next.

USDCAD Technical Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that we have a tight range between the 1.4280 support and the 1.4370 resistance. The sellers will likely step in around the resistance with a defined risk above it to target a break below the support. The buyers, on the other hand, will want to see the price breaking higher to increase the bullish bets into the next resistance.

USDCAD Technical Analysis – 1 hour Timeframe

On the 1 hour chart, there’s not much we can add here as the sellers will look for a rejection around the resistance, while the buyers will look for a break. The red lines define the average daily range for today.

Upcoming Catalysts

Today we have the Fed Chair Powell Testimony. Tomorrow, we get the US CPI report. On Thursday, we have the US PPI and the US Jobless Claims. On Friday, we conclude the week with the US Retail Sales.