USD/CAD Price Analysis: Faces selling pressure above 1.3650

USD/CAD retreats from 1.3650 but stays inside Tuesday’s range.
A soft Canada inflation report has dented hopes of one more interest rate increase from the BoC.
USD/CAD trades directionless in a Symmetrical Triangle pattern, which indicates a squeeze in volatility.

Sagar Dua FXStreet

The USD/CAD pair demonstrates a compression in volatility, trading inside Tuesday's range of 1.3600-1.3700 ahead of the speech from Federal Reserve (Fed) Chair Jerome Powell, scheduled for Wednesday.

The Loonie asset delivered volatile spikes on Tuesday after Statistics Canada reported soft inflation data and the United States Census Bureau reported strong Retail Sales for September. Consumer spending rose by 0.7% due to robust demand for automobiles and higher gasoline prices.

Canada’s monthly headline and core Consumer Price Index (CPI) contracted by 0.1% while investors forecasted a growth by 0.1%. The annual headline and core CPI softened to 3.8% and 2.8% respectively. A soft Canada inflation report has dented hopes of one more interest rate increase from the Bank of Canada (BoC).

USD/CAD trades directionless in a Symmetrical Triangle chart pattern formed on a two-hour scale, which indicates a squeeze in volatility. The upward-sloping trendline of the aforementioned chart pattern is plotted from October 10 low around 1.3570 while the downward-sloping trendline is placed from October 5 high at 1.3786.

The Loonie asset has dropped to near 100-period Exponential Moving Average (EMA) at 1.3610. A further breakdown could strengthen the Canadian Dollar.

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

A decisive break above March 24 high around 1.3800 would expose the asset to March 10 high at 1.3860, followed by the round-level resistance at 1.3900.

In an alternate scenario, a breakdown below September 25 low around 1.3450 would drag the asset toward September 20 low near 1.3400. A further breakdown could expose the asset to a six-week low near 1.3356.

USD/CAD two-hour chart

USD/CAD

Overview
Today last price	1.3624
Today Daily Change	-0.0026
Today Daily Change %	-0.19
Today daily open	1.365

Trends
Daily SMA20	1.3592
Daily SMA50	1.3563
Daily SMA100	1.3417
Daily SMA200	1.3466

Levels
Previous Daily High	1.3703
Previous Daily Low	1.3607
Previous Weekly High	1.3701
Previous Weekly Low	1.3569
Previous Monthly High	1.3694
Previous Monthly Low	1.3379
Daily Fibonacci 38.2%	1.3666
Daily Fibonacci 61.8%	1.3643
Daily Pivot Point S1	1.3603
Daily Pivot Point S2	1.3557
Daily Pivot Point S3	1.3507
Daily Pivot Point R1	1.3699
Daily Pivot Point R2	1.3749
Daily Pivot Point R3	1.3796

Author

Sagar Dua

FXStreet

Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.

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