|

USD/CAD Price Analysis: Remains subdued near 1.3700 as US Dollar slips

  • USD/CAD struggles to hold the 1.3700 support as the US Dollar edges down.
  • US bond yields consolidate as investors focus on US core PCE Price Index data.
  • BoC’s rate cut prospects remain strong as Canada’s inflation softens significantly in March.

The USD/CAD pair remains feeble near the round-level support of 1.3700 in Tuesday’s European session. The Loonie asset comes under pressure as the US Dollar drops amid improvement in the risk appetite of the market participants.

S&P 500 futures have posted some gains in the London session. The appeal for risky assets improves as investors see no further escalation in Middle East conflict on an immediate basis. 10-year US Treasury yields consolidate around 4.63% as investors shift focus to the United States core Personal Consumption Expenditure Price Index (PCE) data for March, which will be published on Friday. The US Dollar Index (DXY) edges down to 105.96.

The underlying inflation data will significantly influence market expectations to Federal Reserve (Fed) rate cuts, which traders anticipate from the September meeting. The annual core PCE Price Index is forecasted to have softened to 2.6% from 2.8% in February with monthly inflation increasing steadily by 0.3%.

Meanwhile, the Canadian Dollar has consistently performed better against the US Dollar since the last trading sessions. The Canadian Dollar could weaken as investors see the Bank of Canada (BoC) starting to reduce interest rates earlier amid easing price pressures. BoC’s preferred inflation measure that excludes eight volatile items softened to 2% in March, allowing policymakers to discuss rate cuts.

USD/CAD faced sharp selling pressure last week after a rally stalled near 1.3850. The asset rallied after a breakout of the Ascending Triangle chart pattern formed on a daily timeframe. The 20-day Exponential Moving Average (EMA) near 1.3674 will be a major support area for the US Dollar bulls.

The 14-period Relative Strength Index (RSI) returns to the 40.00-60.00 range, which indicates that bullish momentum has concluded for now while the upside bias is still intact.

Going forward, a mean-reversion move to near the 20-day EMA around 1.3674 will offer a buying opportunity to market participants. Investors would find resistance near the 22 November 2023, high at 1.3766, followed by the round-level resistance of 1.3800.

In an alternate scenario, a breakdown below April 9 low around 1.3547 will expose the asset to the psychological support of 1.3500 and March 21 low around 1.3456.

USD/CAD daily chart

USD/CAD

Overview
Today last price1.3699
Today Daily Change-0.0002
Today Daily Change %-0.01
Today daily open1.3701
 
Trends
Daily SMA201.3646
Daily SMA501.3574
Daily SMA1001.3496
Daily SMA2001.3531
 
Levels
Previous Daily High1.3753
Previous Daily Low1.3687
Previous Weekly High1.3846
Previous Weekly Low1.3724
Previous Monthly High1.3614
Previous Monthly Low1.342
Daily Fibonacci 38.2%1.3712
Daily Fibonacci 61.8%1.3728
Daily Pivot Point S11.3674
Daily Pivot Point S21.3647
Daily Pivot Point S31.3607
Daily Pivot Point R11.374
Daily Pivot Point R21.378
Daily Pivot Point R31.3807

Author

Sagar Dua

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.

More from Sagar Dua
Share:

Editor's Picks

GBP/USD fails to reclaim 1.3200 as focus shifts to US data

GBP/USD loses its traction and declines toward 1.3150 following a short-lasting recovery attempt to the 1.3200 region in the early European session. The potential upside for the pair appear limited amid UK political instability and rising expectations of US interest rate hikes this year. Traders await the US May PCE inflation data on Thursday for a clear direction.

EUR/USD drops below 1.1350 ahead of US PCE inflation

EUR/USD struggles to stage a rebound and trades in negative territory below 1.1350 on Thursday. The cautious market stance helps the US Dollar holds its ground and weighs on the pair as market focus shifts to US PCE inflation report for May.

Gold struggles to stabilize above $4,000

Gold stays on the back foot after suffering heavy losses on Wednesday and trades below $4,000 on Thursday. The commodity sticks to its bearish bias for the third straight day, and remains close to the lowest level since November 2025, touched on Wednesday, as traders await the crucial US inflation data.

Bitcoin tests $60,000 as whales sell off – Aave and Jupiter show resilience

The broader cryptocurrency market remains under intense selling pressure, with Bitcoin back at $60,000 for the third time this year. On-chain data shows selling pressure from large-wallet investors, commonly referred to as whales, while total liquidations hit nearly $1 billion in 24 hours.

Bitcoin nears make-or-break level ahead of US PCE data

Bitcoin recovers slightly, trading at $61,700 after reaching a new yearly low of $59,103 and a 21-month low the previous day. This bearish price action is supported by the ongoing institutional sell-off, which recorded an outflow of over $469 million on Wednesday.

Regime change: Inside Kevin Warsh's first move to make the Fed unreadable on purpose

The rate did not move. That was the least interesting thing about Kevin Warsh's first meeting in charge of the Fed. The FOMC held its benchmark at 3.50%-3.75% for the fourth straight meeting, exactly as priced, and then the new chair used his first press conference to dismantle the machinery the market has leaned on for a decade.