FUNDAMENTALOVERVIEWUSD:The US dollar sold offacross the board on Wednesday after Trump announced on Truth Social a two-sidedceasefire agreement for two weeks while the US and Iran negotiate a lastingpeace deal. Since then, the price action became more rangebound due to Israeliattacks against Lebanon which the Iranians have been saying was part of theceasefire agreement. The good news is that Iranheld off from retaliating ahead of the peace talks in Islamabad this weekend.But the uncertainty has been keeping the markets in check, nonetheless.Everything hinges on these peace talks as the restart of the war would createstrong distress in the markets and potentially lead to a global recession. In the short-term, a peacedeal would weigh on the greenback amid renewed rate cut bets and unwinding ofthe March positioning. On the other hand, a breakdown of negotiations wouldgive the dollar another boost, potentially pushing it into new highs. CAD:On the CAD side, theeconomic data has been surprising to the downside for a while. In such a case wewould have seen traders pricing in rate cuts for the BoC but given the US-Iran conflictand the elevated energy prices, the market has been looking for rate hikes,which would just increase the damage to the economy. The BoC is current in aneutral stance and it’s being cautious about the monetary policy response tothis negative supply shock. Despite the market pricing in now 36 bps oftightening by year-end, the BoC is more likely to just keep rate steady forlonger unless the war ends and we get a demand boost.USDCAD TECHNICALANALYSIS – DAILY TIMEFRAMEOn the daily chart, we cansee that USDCAD broke below the upwardtrendline that was defining the bullish momentum. This might give the sellersmore conviction to keep pushing into new lows. There’s not much else we can gleanfrom this timeframe, so we need to zoom in to see some more details.USDCAD TECHNICALANALYSIS – 4 HOUR TIMEFRAMEOn the 4 hour chart, we havea resistance zone around the 1.3870 level where there’s also the confluence ofthe major broken upward trendline and the minor downward trendline. If theprice gets there, we can expect the sellers to step in with a defined riskabove the downward trendline to position for a drop into the 1.3750 support.The buyers, on the other hand, will look for a break higher to pile in for arally into the 1.40 handle next. USDCAD TECHNICALANALYSIS – 1 HOUR TIMEFRAMEOn the 1 hour chart, wehave a minor upward trendline defining the current pullback into the resistance.The buyers will likely continue to lean on the trendline to keep pushing intonew highs, while the sellers will look for a break to pile in for a drop intonew lows. The red lines define the average daily range for today. UPCOMING CATALYSTSToday we conclude the week with the Canadian Employment data, the US CPIreport and the University of Michigan Consumer Sentiment survey. This article was written by Giuseppe Dellamotta at investinglive.com.