USD/CAD Price Analysis: Fades bounce off key support around 1.3330 as US inflation looms

USD/CAD struggles near two-month low after posting the first daily gain in five.
Bearish MACD signals, sustained trading below the key EMAs keep Loonie sellers hopeful.
Nearly oversold RSI conditions highlight seven-month-old rising support line ahead of US inflation data, Fed.
Convergence of 200-EMA, 10-EMA caps immediate recovery; break of 1.3330 can refresh yearly low.

Anil Panchal FXStreet

USD/CAD retreats from 1.3383, sidelined near 1.3365 amid the early hours of Tuesday’s Asian session. In doing so, the Loonie pair fails to defend the previous day’s corrective bounce off a seven-month-old ascending support line while staying near the lowest levels in two months.

That said, the below 50.0 levels of the RSI (14) line joins an upward-sloping support line from mid-November 2022 to restrict the short-term downside of the USD/CAD pair around 1.3330.

However, the bearish MACD signals and the Loonie pair’s sustained trading below the 200-day Exponential Moving Average (EMA), close to 1.3410 by the press time, keeps the sellers hopeful.

Adding strength to the 200-EMA hurdle is the 10-EMA level surrounding 1.3420, which in turn highlights the 1.3410-20 as the short-term upside limit for the USD/CAD pair.

Should the quote manage to cross the 1.3420 resistance, the previous weekly high of around 1.3460 can act as an extra filter towards the north before welcoming the USD/CAD buyers.

On the flip side, a daily closing below the aforementioned key support line, around 1.3330 at the latest, can quickly fetch the USD/CAD price towards the yearly low of 1.3262. However, the bottoms marked in May and April, respectively near 1.3315 and 1.3300 will challenge the Loonie bears.

It should be noted that the November 2022 low of near 1.3226 can act as the extra downside filter for the Loonie pair bears to watch before taking control.

Apart from the above mentioned technical details, the USD/CAD traders should also keep their eyes on the US Consumer Price Index (CPI) figures for May as the Fed decision looms on Wednesday.

Also read: US Inflation Preview: Why the US Dollar is more likely to fall than rise, three scenarios

USD/CAD: Daily chart

Trend: Further downside expected

Additional important levels

Overview
Today last price	1.3365
Today Daily Change	0.0027
Today Daily Change %	0.20%
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

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

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