Fundamental Analysis
Today, markets are focused on the FOMC and Bank of Canada meetings. The Fed is expected to cut its benchmark rate by 25 basis points to 4.00–4.25 %, while the BoC could also lower its rate by 25 basis points to 2.50 % due to moderate inflation and weak employment. All eyes will be on the Fed’s dot plot and Powell’s tone, which will indicate whether markets should price in further rate cuts in the short and medium term.
Bullish scenario for USDCAD: if the Fed adopts a less dovish tone than expected or the BoC surprises with more easing, the CAD would weaken against the USD, pushing the pair higher.
Bearish scenario: if the Fed confirms the rate cut and projects a more aggressive pace of monetary easing while the BoC remains dovish but within expectations, the market could favor the CAD against the dollar, pushing USDCAD lower.
Overall, the pair will be highly sensitive to risk sentiment and the interpretation of both announcements. Traders should monitor H1 candle closes and the initial market reaction to gauge intraday direction, as a coordinated easing tone in North America could trigger volatile movements with a clear trend toward USD weakening against CAD.
Technical Analysis
USDCAD | H4
Supply Zones (Sells): 1.3839
Demand Zones (Buys): 1.3750
This analysis is conducted ahead of the Bank of Canada and FOMC meetings. As seen on the chart, the price rebounded from the day’s open at 1.3736 and formed a volume cluster around 1.3750.
As long as the price remains above the weekly POC at 1.3750, a rebound toward 1.3770 is expected, with an extension to the broken support at 1.3788 or 1.38, from where sales could resume toward 1.3750.
If the price bounces again from the weekly demand POC at 1.3750, it may aim for liquidity from the weekly opening supply node.
However, suppose the weekly POC at 1.3750 is decisively broken. In that case, a bearish continuation is expected toward the August support at 1.3721 and 1.37 for the day’s development, with potential extension toward 1.36 in the coming days. This bearish trend would mainly be driven by USD weakness, despite both central banks implementing rate cuts today.
*Exhaustion/Reversal Pattern (PAR): Before entering trades at key zones, always wait for formation and confirmation of a PAR on M5, as shown here 👉 https://t.me/spanishfbs/2258
*Discovered POC: Point of Control (POC) is the level or zone with the highest volume concentration. If a bearish move followed it, it is considered a sell zone and forms resistance. Conversely, if preceded by a bullish impulse, it is considered a buy zone, usually at lows forming support zones.
