Short

USD/CAD 1.35 with a divergence to be filled!

The USD/CAD pair is struggling to make significant moves, hovering near 1.3650 during the European session. The start of the week for the US Dollar is lackluster, showing signs of stalling after a positive surge following the recent release of the US Consumer Price Index. Accommodative comments from various Federal Reserve officials suggest a likely continuation of unchanged interest rates into November, signaling a potential end to the tightening policy cycle. This, coupled with a positive outlook for US equity futures, is putting pressure on the safe-haven Greenback, giving a boost to the USD/CAD pair. However, the decline of the US Dollar is constrained by expectations of a prolonged period of higher rates, reinforced by recent US consumer inflation figures surpassing the Fed's target. Elevated US Treasury bond yields continue to support the US Dollar, but a slight decrease in crude oil prices may provide some support to the pair by undermining the commodity-linked Loonie. Caution is advised, and confirmation of market direction is awaited, especially after last week's rebound from the 1.3570-1.3565 range. Market participants are closely monitoring the US economic calendar, including the Empire State Manufacturing Index, as well as Fedspeak, US bond yields, and overall risk sentiment, which will shape the USD's trajectory in the North American session. Additionally, developments in oil prices will also influence the USD/CAD pair's path. Moreover, the price is in a support/resistance zone after the breakout of a bearish trendline, a trendline that could be retested before a continuation of the descent and filling the divergence present in the market, down to the 1.35 zone. Let me know what you think, leave a like and a comment to support our work. Greetings from Nicola, the CEO of Forex48 Trading Academy.

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