#USDCAD @ 1.33992 trades on a softer note near 1.3391 on the softer USD. (Pivot Orderbook analysis)

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• USD/CAD trades on a softer note near 1.3391 on the softer USD.
• The swaps market anticipates nearly 175 basis points (bps) of Federal Reserve (Fed) easing this year.
• The Bank of Canada (BoC) is widely expected to start cutting interest rates this year after a series of rate hikes.
• The Canadian Consumer Price Index (CPI), and US Retail Sales for December will be in the spotlight this week.

The pair currently trades last at 1.33992.

The previous day high was 1.3412 while the previous day low was 1.3343. The daily 38.2% Fib levels comes at 1.3386, expected to provide support. Similarly, the daily 61.8% fib level is at 1.3369, expected to provide support.

The USD/CAD pair remains capped under the 1.3400 mark during the early European trading hours on Monday. The downtick of the pair is backed by the decline of the US Dollar (USD) and the weaker US Producer Price Index (PPI) report. The pair currently trades around 1.3391, gaining 0.19% on the day.

The Federal Reserve’s (Fed) easing expectations remain elevated. According to the WIRP, the markets have priced in nearly 85% odds of a rate cut at their March meeting versus 75% at the start of last week. Additionally, the swaps market anticipates nearly 175 basis points (bps) of Fed easing this year, compared to less than 150 bps at the start of last week. The US December Retail Sales data Wednesday will be in the spotlight. The headline figure is estimated to show an increase of 0.4% MoM from 0.3% in November.

On the Loonie front, the Bank of Canada (BoC) is widely expected to start cutting interest rates this year after a series of rate hikes. The first rate cuts might take place as early as this spring. WIRP suggests a rate cut is fully priced at its April meeting, with nearly 150 bps of total rate cut priced in for this year. Meanwhile, the Canadian Consumer Price Index (CPI) for December on Tuesday could offer some hints about further monetary policy by BoC. The headline inflation is expected at 3.3% YoY from 3.1% in November.

Later on Monday, the Canadian Wholesale Sales, Manufacturing Sales, and Bank of Canada Business Outlook Survey will be released. On Tuesday, market players will keep an eye on the December Canadian Consumer Price Index (CPI). The attention will shift to the December US Retail Sales on Wednesday. Traders will take cues from these figures and find trading opportunities around the USD/CAD pair.

Technical Levels: Supports and Resistances

USDCAD currently trading at 1.3392 at the time of writing. Pair opened at 1.3407 and is trading with a change of -0.11 % .

The pair is trading above its 20 Daily moving average @ 1.3319, below its 50 Daily moving average @ 1.3511 , below its 100 Daily moving average @ 1.357 and below its 200 Daily moving average @ 1.348

The previous day high was 1.3412 while the previous day low was 1.3343. The daily 38.2% Fib levels comes at 1.3386, expected to provide support. Similarly, the daily 61.8% fib level is at 1.3369, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 1.3363, 1.3319, 1.3294
• Pivot resistance is noted at 1.3432, 1.3456, 1.35

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