FundamentalOverviewThe USD came under somepressure on Friday as the risk-off sentiment caused by Trump’s threat ofsubstantially increasing tariffs on China weighed on Treasury yields. Over theweekend, we had more soothing comments from Trump and other US officials whichtriggered a recovery in risk sentiment. The positive mood isweighing a bit on the greenback amid lack of bullish catalysts. Domestically,nothing has changed for the US dollar as the US government shutdown continuesto delay many key US economic reports. The dollar “repricing trade” needs strongUS data to keep going, especially on the labour market side, so any hiccup onthat front is likely to keep weighing on the greenback. The market pricing shiftedmore dovish with 47 bps of easing by year-end and 115 bps cumulatively by theend of 2026. The BLS announced last week that it will release the US CPI reportdespite the shutdown on October 24, so that’s going to be a key risk event. Incase we get hot data, we will likely see a hawkish repricing in interest ratesexpectations with the December cut being priced out. Conversely, a soft reportshouldn’t change much in terms of pricing, but it will likely weigh on thegreenback anyway.On the CAD side, we got astrong employment report on Friday beating expectations by a big margin althoughthe unemployment rate remained unchanged. The BoC cut interest rates by 25 bpsas expected at the last meeting and stressed the need to remain attentive torisks and setting policy on a meeting-by-meeting basis. The probabilities of acut in October fell to 56% following the employment report but we still havethe CPI report before the next meeting. USDCADTechnical Analysis – Daily TimeframeOn the daily chart, we cansee that USDCAD reached the key 1.4018 level last week and pulled back. This iswhere we can expect the sellers to step in with a defined risk above the levelto position for a drop into new cycle lows. The buyers, on the other hand, willwant to see the price breaking higher to increase the bullish bets into the1.43 handle next. USDCAD TechnicalAnalysis – 4 hour TimeframeOn the 4 hour chart, we cansee that we have an upward trendline defining the bullish momentum. The buyerswill likely lean on the trendline with a defined risk below it to keep pushinginto new highs, while the sellers will look for a break lower to increase thebearish bets into new lows. USDCAD TechnicalAnalysis – 1 hour TimeframeOn the 1 hour chart, we cansee that we a support zone around the 1.3975 level. If the price gets there, wecan expect the buyers to step in with a defined risk below the support toposition for a rally into new highs. The sellers, on the other hand, will lookfor a break lower to extend the pullback into the trendline. The red linesdefine the average daily range for today. Upcoming CatalystsThis week is going to be very light again in terms of datareleases given the US government shutdown. Data like Retail Sales and JoblessClaims won’t be released. We will have lots of Fed speakers though with FedChair Powell scheduled for tomorrow. Given the lack of key US data though, it’svery unlikely to see a change in stance. For now, we know that only the US CPIwill be published despite the shutdown, which is scheduled for Friday October24. This article was written by Giuseppe Dellamotta at investinglive.com.