USD/CAD Price Analysis: At make or a break below 1.3400


  • USD/CAD consolidates below 1.3400 as investors await the US Inflation data.
  • Bets in favour of rate cuts from the Fed in March may deepen if the US CPI report turns out sticky.
  • USD/CAD reflects a volatility contraction pattern formation.

The USD/CAD pair falls slightly to near 1.370 after failing to sustain above the round-level resistance of 1.3400. The Loonie asset demonstrates a sheer consolidation as investors shift focus towards the United States inflation data for December, which will be published on Thursday.

S&P500 futures struggle to hold gains as market mood remains cautious. The US Dollar Index (DXY) drops to near 102.44 despite persistent uncertainty over rate cuts by the Federal Reserve (Fed). 10-year US Treasury yields have slipped slightly below 4.0%.

Investors will keenly watch the US inflation data as it will provide fresh cues about likely rate cuts by the Federal reserve (Fed) in March. According to the estimates, the headline inflation rose by 0.2% against 0.1% growth in November. The annual headline Consumer Price Index (CPI) grew by 3.2% from 3.1% increase a month ago.

Meanwhile, core inflation grew steadily on a monthly basis. The annual core CPI data decelerated to 3.8% against the former reading of 4.0%.

USD/CAD struggles for a direction amid formation of a volatility contraction pattern on an hourly scale near 1.3400. A sharp decline in volatility indicates indecisiveness among market participants amid absence of a potential trigger. Horizontal resistance plotted from December 15 high around 1.3405 continues to act as barricade for US Dollar bulls.

The 50-period Exponential Moving Average (EMA) around 1.3380 continues to provide support to the US Dollar.

The Relative Strength Index (RSI) (14) oscillates in a 40.00-60.00 range, which indicates a consolidation ahead.

Fresh upside would appear if the Loonie asset breaks above January 9 high of 1.3415. This would open upside towards December 3 low at 1.3480, followed by December 5 low at 1.3540.

On the flip side, a downside move below January 5 low at 1.3288 would expose the asset to December 22 low at 1.3220. Breach of the latter would build more pressure on the asset and will drag it towards December 27 low at 1.3177.

USD/CAD hourly chart

USD/CAD

Overview
Today last price 1.3381
Today Daily Change -0.0018
Today Daily Change % -0.13
Today daily open 1.3399
 
Trends
Daily SMA20 1.3324
Daily SMA50 1.3532
Daily SMA100 1.3576
Daily SMA200 1.3481
 
Levels
Previous Daily High 1.3415
Previous Daily Low 1.3341
Previous Weekly High 1.3399
Previous Weekly Low 1.3229
Previous Monthly High 1.362
Previous Monthly Low 1.3178
Daily Fibonacci 38.2% 1.3387
Daily Fibonacci 61.8% 1.3369
Daily Pivot Point S1 1.3355
Daily Pivot Point S2 1.3311
Daily Pivot Point S3 1.3281
Daily Pivot Point R1 1.3429
Daily Pivot Point R2 1.3459
Daily Pivot Point R3 1.3503

 

 

Share: Feed news

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended content


Recommended content

Editors’ Picks

EUR/USD catches a ride on broad-market Greenback weakness

EUR/USD catches a ride on broad-market Greenback weakness

EUR/USD drifted up in a mild recovery from last Friday’s dip into 1.0670. The new trading week is kicking things off with risk appetite firmly pinned higher, sending the US Dollar lower and bolstering the Euro as investors head into a relatively quiet Tuesday.

EUR/USD News

GBP/USD rises to 1.2700 nearing 14-day EMA

GBP/USD rises to 1.2700 nearing 14-day EMA

GBP/USD extends gains for the second successive session, trading around 1.2700 during early Tuesday. Analysis of the daily chart shows a broadening bottom pattern in price action, representing increasing volatility. This chart pattern suggests a potential correction before moving lower.

GBP/USD News

Gold struggle extends above $2,300, with Fedspeak on tap

Gold struggle extends above $2,300, with Fedspeak on tap

Gold price is reversing a part of Monday’s rebound, as sellers fight back early Tuesday amid a risk-on market profile. The US Dollar nurses losses alongside the US Treasury bond yields, undermined by the dovish commentaries from Federal Reserve policymakers.

Gold News

Tron price primed for a surge after breaking descending trendline barrier

Tron price primed for a surge after breaking descending trendline barrier

Tron price has surged above and retested the descending trendline, indicating a bullish market structure. On-chain data reveals increasing activity among TRX active accounts, suggesting heightened blockchain usage that may fuel an impending rally in Tron’s price.

Read more

Trading the week ahead

Trading the week ahead

Starting Tuesday, we're watching the Canadian CPI print closely. The Bank of Canada's recent minutes suggested hesitation about the last rate cut, hinting they might delay further cuts. This makes the upcoming inflation data crucial.

Read more

Forex MAJORS

Cryptocurrencies

Signatures