USD/CAD struggles below 1.3500, over one-month low as traders look to Canadian CPI


  • USD/CAD enters a bearish consolidation phase and oscillates in a range near a one-month low.
  • Bullish Crude Oil prices underpin the Loonie and cap the upside amid subdued USD demand.
  • Traders look to the Canadian CPI report for some impetus ahead of the FOMC on Wednesday.

The USD/CAD pair oscillates in a narrow range during the Asian session on Tuesday and consolidates its recent losses to over a one-month low, around 1.3470 region touched the previous day. Spot prices, however, manage to hold above a technically significant 200-day Simple Moving Average (SMA), currently pegged near the 1.3460-1.3455 area, as traders keenly await the outcome of the highly-anticipated FOMC monetary policy meeting.

The Federal Reserve (Fed) is scheduled to announce its decision on Wednesday and is widely anticipated to maintain the status quo, which keeps the US Dollar (USD) depressed below a six-month peak. Meanwhile, Crude Oil prices stand tall near the highest level since November 2022, bolstered by concerns about tighter global supplies and hopes for fuel demand recovery in China – the world's top Oil importer. This, in turn, continues to underpin the commodity-linked Loonie and acts as a headwind for the USD/CAD pair.

That said, growing acceptance that the Fed will stick to its hawkish stance and keep interest rates higher for longer in the wake of still-sticky inflation. The outlook remains supportive of elevated US Treasury bond yields and helps limit any meaningful downside for the buck. Traders might also prefer to wait for fresh cues about the Fed's future rate-hike path. Hence, the focus will remain on the ‘dot plot’ and inflation expectations, along with Fed Chair Jerome Powell's comments at the post-meeting press conference on Wednesday.

In the meantime, traders on Tuesday will look to the latest Canadian consumer inflation figures, due for release later during the early North American session. The US economic docket, meanwhile, features housing market data – Building Permits and Housing Starts. This, along with Oil price dynamics, could allow traders to grab short-term opportunities heading into the key central bank event risk, which will play a key role in driving the USD demand in the near term and determining the next leg of a directional move for the USD/CAD pair.

Technical levels to watch

USD/CAD

Overview
Today last price 1.3485
Today Daily Change -0.0001
Today Daily Change % -0.01
Today daily open 1.3486
 
Trends
Daily SMA20 1.3572
Daily SMA50 1.3418
Daily SMA100 1.3402
Daily SMA200 1.3464
 
Levels
Previous Daily High 1.3528
Previous Daily Low 1.3472
Previous Weekly High 1.3639
Previous Weekly Low 1.3493
Previous Monthly High 1.364
Previous Monthly Low 1.3184
Daily Fibonacci 38.2% 1.3493
Daily Fibonacci 61.8% 1.3507
Daily Pivot Point S1 1.3463
Daily Pivot Point S2 1.3439
Daily Pivot Point S3 1.3406
Daily Pivot Point R1 1.3519
Daily Pivot Point R2 1.3552
Daily Pivot Point R3 1.3576

 

 

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