USD/CAD Price Analysis: Looks vulnerable above 1.3160

USD/CAD is looking vulnerable above the immediate support of 1.3160 amid weakness in the US Dollar.
The recovery move in the USD Index seems fragile due to an absence of supportive fundamentals.
USD/CAD is expected to continue its downside journey toward the horizontal support at 1.3077.

Sagar Dua FXStreet

The USD/CAD pair is struggling in maintaining an auction above 1.3150 in the early European session. The Loonie asset is failing to pick strength as the upside in the US Dollar Index (DXY) seems restricted due to easing inflationary pressures in the United States economy.

The recovery move in the USD Index seems fragile due to an absence of supportive fundamentals. The fight against United States inflation by the Federal Reserve (Fed) is still on and the central bank is ready to raise interest rates further. Also, US retail demand is not at its best as households have postponed demand for big-ticket items to fulfill basic needs.

Meanwhile, there is some strength in the Canadian Dollar despite inflationary pressure in Canada has eased further. June’s core Consumer Price Index (CPI) reported monthly disinflation by 0.1% against expectations of 0.5%. This would allow the Bank of Canada (BoC) to keep interest rates steady ahead.

USD/CAD has faced selling pressure to near the 20-period daily Exponential Moving Average (EMA) at 1.3230 after attempting a recovery move from around 1.3100. The Loonie asset is expected to continue its downside journey towards the horizontal support plotted from 12 May 2022 high at 1.3077.

The Relative Strength Index (RSI) (14) is on the edge of 40.00. A slippage below the same would trigger the downside momentum.

Should the asset break below June 27 low at 1.3117, Canadian Dollar bulls would drag the asset towards 12 May 2022 high at 1.3077, followed by the psychological support at 1.3000.

In an alternate scenario, a confident recovery above June 28 high at 1.3277 would drive the asset toward June 15 high at 1.3355 and July 7 high at 1.3387.

USD/CAD daily chart

USD/CAD

Overview
Today last price	1.3168
Today Daily Change	-0.0001
Today Daily Change %	-0.01
Today daily open	1.3169

Trends
Daily SMA20	1.322
Daily SMA50	1.335
Daily SMA100	1.3463
Daily SMA200	1.3486

Levels
Previous Daily High	1.3244
Previous Daily Low	1.3167
Previous Weekly High	1.3304
Previous Weekly Low	1.3093
Previous Monthly High	1.3585
Previous Monthly Low	1.3117
Daily Fibonacci 38.2%	1.3196
Daily Fibonacci 61.8%	1.3214
Daily Pivot Point S1	1.3143
Daily Pivot Point S2	1.3117
Daily Pivot Point S3	1.3067
Daily Pivot Point R1	1.3219
Daily Pivot Point R2	1.3269
Daily Pivot Point R3	1.3295

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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