Technical Outlook on USD/CAD, AUD/USD, US500

US CPI, Warsh testimony, BoC --> USD/CAD

USD/CAD has been drifting lower since its strong two-month rally stalled near a 14-month high of 1.4246, where the pair faced a triple rejection over the past three weeks. With the price falling below its 20-day simple moving average (SMA) on Friday, traders are questioning whether a deeper pullback is underway as markets prepare for key US and Canadian events.

In the US, the CPI headline for June is expected to cool down to 3.8% y/y from 4.2% previously, while core inflation could remain steady near 2.9% y/y, still above the Fed’s 2.0% target. Meanwhile, renewed US-Iran tensions and uncertainty around energy prices could put additional focus on Kevin Warsh’s first semi-annual testimony before Congress on Tuesday and Wednesday, where he may face tough questions on inflation and his interest rate outlook.

In Canada, the central bank is expected to keep rates unchanged at 2.25%. With the economy showing no growth in Q1 2026 and core inflation remaining close to target, policymakers may prefer a cautious, data-dependent approach given the elevated headline inflation at 3.2% y/y.

Overall, the BoC may avoid sending strong signals, leaving the US dollar as the key driver for USDCAD. A break below the 50% Fibonacci retracement of the 2025-2026 downtrend near 1.4135 could strengthen the case for another bearish move.

China Q2 GDP growth --> AUD/USD

AUD/USD remains technically vulnerable after finding resistance around its 20-day simple moving average. The pair could extend its sequence of lower lows and lower highs following the four-year peak of 0.7276 in May. However, the 200-day SMA near 0.6880 remains a key support area.

Beyond US developments, attention will turn to China’s Q2 GDP figures, the first major economic growth report covering the period affected by the Middle East energy shockwave. Growth is expected to slow to 4.5% y/y from 5.0% previously, remaining within China’s 2026 target range of 4.5%-5.0%.

Given the geopolitical uncertainty during the quarter and Australia’s trade dependence on China, any major surprise could impact the Australian dollar. Recall that net exports were already the biggest drag on Australia’s GDP growth slowdown in Q1.

Q2 earnings --> US500

The next earnings season is approaching, with major US banks starting second-quarter releases on Tuesday. Netflix’s report on Thursday may offer fresh clues on consumer sentiment. Meanwhile, financial reports and forward guidance from AI-related companies such as Taiwan Semiconductor and Europe’s ASML will not be missed as artificial intelligence remains a key driver of Wall Street’s record rally.

Having found support near its 20- and 50-day SMAs, the US500 index is looking to resume its bullish run. However, a decisive close above the previous high near 7,578 is still needed to fully eliminate downside risks and clear the path toward fresh all-time highs.