- USD/CAD consolidates as investors shift focus toward the US inflation data.
- Investors underpinned the Canadian Dollar against the greenback due to rising oil prices.
- USD/CAD auctions in the Rising Channel pattern in which each pullback is considered as a buying opportunity.
The USD/CAD pair trades directionless in the European session ahead of the United States Consumer Price Index (CPI) data for August, which will be published at 12:30 GMT. The Loonie asset has been offered in the past three trading sessions due to strength in the Canadian Dollar, backed by strong oil prices.
Oil price aims to capture the crucial resistance of $90.00 for the first time since November 22 as the OPEC projected a cheerful oil demand outlook on expectations that economies are learning well about handling the burden of higher interest rates. It is worth noting that Canada is the largest exporter of oil to the United States and higher oil prices support the Canadian Dollar.
Meanwhile, investors keep focusing on the US inflation data. As per the estimates, headline inflation is seen expanding at a healthy pace of 0.6% due to recovered gasoline prices while core CPI is expected to maintain a steady pace of 0.2%. The US Dollar Index (DXY) trades inside Monday are trading range.
USD/CAD auctions in the Rising Channel chart pattern formed on a two-hour scale in which each pullback is considered as a buying opportunity by the market participants. The asset hovers near the lower portion of the aforementioned chart pattern and a breakdown of the same could warrant a bearish reversal.
The 20-period Exponential Moving Average (EMA) continues to act as a barricade for the US Dollar bulls.
Meanwhile, the Relative Strength Index (RSI) (14) oscillates in the bearish range of 20.00-40.00, which indicates bearish bias but a likelihood of a bullish reversal move also persists.
Going forward, a breakdown below August 30 low of 1.3513 would drag the asset toward August 09 high at 1.3454 followed by August 10 low at 1.3373.
On the contrary, a confident recovery move above the round-level resistance of 1.3600 would send the major toward September 05 high at 1.3670. Breach of the latter would further push the asset toward September 07 high around 1.3700.
USD/CAD two-hour chart
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