USD/CAD Price Forecast: Holds recovery move around 1.3700

USD/CAD trades higher around 1.3700 after recovering from the monthly low of 1.3650 posted on Friday.
Iran declines to return for another round of talks with the US.
Investors await the Canadian inflation data for March.

Sagar Dua FXStreet

The USD/CAD pair holds its Friday’s recovery move around 1.3700 during the late Asian trading session on Monday. The Loonie pair ticks up as renewed concerns over the longevity of the temporary ceasefire between the United States (US) and Iran has improved the safe-haven demand of the US Dollar (USD).

As of writing, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, is up 0.1% to near 98.30.

Iran has refused to resume negotiations with the US, citing Washington’s "excessive demands, unrealistic expectations, constant shifts in stance, repeated contradictions, and the ongoing naval blockade”, which don’t lead to a fair deal between the two nations.

In Canada, investors await the Consumer Price Index (CPI) data for March, which will be published at 12:30 GMT. Investors will pay close attention to the inflation data to get fresh cues on the Bank of Canada’s monetary policy outlook. The data is expected to show that the headline CPI grew strongly by 1.1% Month-on-Month (MoM) against February’s reading of 0.5%.

USD/CAD technical analysis

USD/CAD trades marginally higher at around 1.3700 at the press time. The pair holds below the 20-day exponential moving average (EMA) at 1.3780, keeping the near-term tone bearish.

The Relative Strength Index (RSI) at 38.8 leans toward oversold territory, suggesting downside pressure persists but with limited room before stretched conditions emerge.

On the topside, initial resistance is located at the 20-day EMA at 1.3780, and a daily close above this level would be needed to ease the current bearish pressure. On the downside, the uptrend support line from 1.3500 offers immediate support around 1.3650. A sustained move below 1.3650 would expose deeper losses toward prior swing levels around 1.3530.

(The technical analysis of this story was written with the help of an AI tool.)

Economic Indicator

Consumer Price Index (MoM)

The Consumer Price Index (CPI), released by Statistics Canada on a monthly basis, represents changes in prices for Canadian consumers by comparing the cost of a fixed basket of goods and services. The MoM figure compares the prices of goods in the reference month to the previous month. Generally, a high reading is seen as bullish for the Canadian Dollar (CAD), while a low reading is seen as bearish.

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