USD/CAD Price Analysis: The critical support zone is located at the 1.3495-1.3500 region

The USD/CAD pair trades in negative territory for the second consecutive day. The Greenback declined against its rivals due to the downbeat US PMI data and a decline in US Treasury yields. The pair currently trades near 1.3527, up 0.01% for the day.

That said, Business activity in the United States in August expanded at a slow pace. The preliminary S&P Global Composite PMI decreased to 50.4, down from 52.0 previously and below market expectations of 52.0. This is the largest decrease since November 2022. Meanwhile, US Treasury yields retreated from multi-year highs and declines below 4.20%.

From the technical perspective, USD/CAD holds below the 100-hour Exponential Moving Average (EMA), which means further downside looks favorable for the major pair. Meanwhile, the Relative Strength Index (RSI) stands below 50, activating the bearish momentum for the USD/CAD pair for the time being.

Any follow-through buying above 1.3535 will be exposed to further upside. The mentioned level is a confluence of the middle line of the Bollinger Band and the 100-hour EMA. The next upside stop is located at 1.3575 (high of August 18, the upper boundary of the Bollinger Band), followed by a psychological figure at 1.3600. Further north, the pair will see a rally to 1.3650 (a high of May 31).

On the downside, the critical support zone for USD/CAD is located at the 1.3495-1.3500 region, portraying a psychological round figure and the lower limit of the Bollinger Band. The additional downside filter to watch is 1.3475 (Low of August 16) en route to 1.3445 (Low of August 15) and finally at 1.3410 (Low of August 11).
 

USD/CAD one-hour chart