USDCAD Technical Analysis – We remain stuck in a range

Fundamental Overview

The USD appreciated a little the day after the FOMC decision although it seemed more like a technical pullback as the central bank didn’t offer anything new. In fact, the Fed just delivered on expectations keeping rates steady, reducing the QT pace, revising growth lower and inflation higher, and keeping the dot plot mostly unchanged.

Fed Chair Powell just acknowledged the current uncertainty around Trump’s policies and the inflation outlook but confirmed that the economy remains healthy, and the Fed is in a good position to wait for more clarity. The market is pricing around 69 bps of easing by year-end.

On the CAD side, the BoC cut interest rates by 25 basis points to 2.75% as expected recently amid concerns over weaker growth ahead due to the trade uncertainty and US tariffs. The central bank emphasized a cautious approach to future decisions, balancing the upward pressure on inflation against the downward pressure on weaker demand.

Governor Macklem acknowledged the economic uncertainty and warned that a prolonged trade war could slow GDP growth, weaken the job market, and push inflation higher, creating a difficult policy environment. The market sees a 67% chance of no change at the upcoming meeting and a total of 49 bps of easing by year-end.

USDCAD Technical Analysis – Daily Timeframe

On the daily chart, we can see that USDCAD continues to mostly range between the 1.42 and 1.45 levels as the uncertainty around tariffs remains high. There’s not much we can glean from this timeframe, so we need to zoom in to see some more details.

USDCAD Technical Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that as the price last week probed above the key 1.4365 level but eventually failed to sustain the momentum as the sellers piled in for a drop back into the 1.4245 support. The buyers will want to see the price breaking above the 1.4365 level again to start targeting the 1.4500 resistance next.

USDCAD Technical Analysis – 1 hour Timeframe

On the 1 hour chart, there’s not much else we can add here as the buyers will look for a break above the 1.4365 level, while the sellers will continue to pile in around the level to keep targeting the support. The red lines define the average daily range for today.

Upcoming Catalysts

Today we get the US Flash PMIs. Tomorrow, we have the US Consumer Confidence report. On Thursday, we get the latest US Jobless Claims figures. On Friday, we conclude the week with the Canada GDP and the US PCE report.