USD/CAD jumps above the 1.3370 zone amid strong US Dollar

USD/CAD jumped to a daily high of 1.3384 following four days of losses.
Strong Dollar and falling Oil prices weigh on the CAD.
All eyes are on Tuesday’s inflation data from the US.

Patricio Martín FXStreet

During Monday’s session, the USD/CAD cut a four-day losing streak jumping to a daily high of 1.3384 as the US Dollar held its footing ahead of an eventful week. On the other hand, the Lonnie seems to be suffering from the plunge in Oil prices which have seen losses of more than 3% on the day.

Attention shifts to CPI data and Fed decision

Markets seem to be awaiting the upcoming release of the US Consumer Price Index (CPI) data for May to define direction. It is anticipated that the headline figure will show a slowdown to a year-on-year (YoY) rate of 4.1%, while the Core measure is expected to decline from the previous 5.5% YoY to 5.3%.

In addition, the CME FedWatch Tool, currently suggests a 25% chance of an interest rate hike for the upcoming Wednesday’s Federal Reserve (Fed) decision. Moreover, rate cuts are no longer anticipated by the end of the year, so market participants will keep an eye on Fed Chair Powell’s presser on Wednesday looking for clues regarding forward guidance

On the Canadian side, the CAD bulls seem to have taken a step back and are consolidating gains from last week’s Bank of Canada (BoC) surprising 25 basis point (bps) hike. Moreover, the Loonie seems to be facing further weakness amid Oil’s heavy losses as the WTI (Western Texas Intermediate) is down by 3.60% on the day, trading at the $67.45 level.

USD/CAD levels to watch

According to the daily chart, the USD/CAD shows a neutral to bearish perspective for the short term. Despite indicators having gained some traction, they are still operating in negative territory. The Relative Strength Index (RSI) sits below its midline but exhibits a positive slope. while, the Moving Average Convergence Divergence (MACD) printed a decreasing red bar, indicating diminishing selling momentum.

The 1.3350 zone level is key for USD/CAD to maintain its upside bias. If breached, the price could see a steeper decline towards the 1.3310 area and towards the multi-month low at 1.3300. Furthermore, upcoming resistance for USD/CAD is seen at the zone at 1.3380 level, followed by the psychological mark at 1.3400 and the 1.3450 area.

USD/CAD daily chart

USD/CAD

Overview
Today last price	1.3374
Today Daily Change	0.0036
Today Daily Change %	0.27
Today daily open	1.3338

Trends
Daily SMA20	1.3492
Daily SMA50	1.3488
Daily SMA100	1.3515
Daily SMA200	1.3514

Levels
Previous Daily High	1.3371
Previous Daily Low	1.3313
Previous Weekly High	1.3462
Previous Weekly Low	1.3313
Previous Monthly High	1.3655
Previous Monthly Low	1.3315
Daily Fibonacci 38.2%	1.3335
Daily Fibonacci 61.8%	1.3349
Daily Pivot Point S1	1.331
Daily Pivot Point S2	1.3283
Daily Pivot Point S3	1.3252
Daily Pivot Point R1	1.3368
Daily Pivot Point R2	1.3399
Daily Pivot Point R3	1.3426

Author

Patricio Martín

FXStreet

Patricio is an economist from Argentina passionate about global finance and understanding the daily movements of the markets.

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