USD/CAD traded with losses amid a weak US Dollar

The USD/CAD traded in the 1.3136 - 1.3184 range, setting a new low since September 2022.
Canadian Core inflation is expected to fall to 3.9% YoY in May.
Eyes on Jerome Powell’s speech at ECB’s forum on Wednesday.

Patricio Martín FXStreet

The USD/CAD pair faced downward pressure as the US Dollar weakened, declining to a low of 1.3136, its lowest level since September 2022. Furthermore, the focus shifts to the release of Canadian inflation figures on Tuesday, which are expected to have decelerated in May. Moreover, investors await Jerome Powell's upcoming speech at the ECB's forum on Wednesday, which could provide further direction for the market.

Canadian inflation figures and Powell’s Speech to set short-term trajectory

On Tuesday, the Bank of Canada will release inflation figures for May, which are expected to show a deceleration. The headline inflation per the Consumer Price Index (CPI) is seen falling to 3.4% YoY while the Core measures to 3.9% YoY. The CPI measure is a key gauge of inflation for central banks, which tends to influence monetary policy decisions. Hot figures are usually associated with interest rate hikes.

On the other hand, investors will look for clues in Wednesday’s speech by Jerome Powell in the ECB’s forum. The markets are eagerly trying to decipher the fact that Federal Open Market (FOMC) members as per the revised dot plots, are seeing an additional 50 basis points (bps) hike in 2023. In that sense, any hawkish surprise will give a boost to the US Dollar whose DXY index is currently trading with losses at the 102.78 area.

In addition, mid-tier economic data released on Tuesday, including Durable Goods data from May may have an impact on the Greenback’s price dynamics.

USD/CAD Levels to watch

Technically speaking, the USD/CAD maintains a bearish outlook for the short term, as per indicators on the daily chart. The Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) are both showing weakness, standing in negative territory approaching oversold conditions. Moreover, the pair trades below its main moving averages, indicating that the sellers have the upper hand.

On the downside, the next support levels to watch are the daily low at 1.3136, followed by the 1.3115 zone and the psychological mark at 1.3100. Conversely, upcoming resistance for the pair is seen at the 1.3170 level, followed by the 1.3190 and 1.3200 areas.

USD/CAD Daily chart

USD/CAD

Overview
Today last price	1.3152
Today Daily Change	-0.0031
Today Daily Change %	-0.24
Today daily open	1.3183

Trends
Daily SMA20	1.3347
Daily SMA50	1.3446
Daily SMA100	1.3505
Daily SMA200	1.3519

Levels
Previous Daily High	1.3226
Previous Daily Low	1.3143
Previous Weekly High	1.327
Previous Weekly Low	1.3139
Previous Monthly High	1.3655
Previous Monthly Low	1.3315
Daily Fibonacci 38.2%	1.3194
Daily Fibonacci 61.8%	1.3175
Daily Pivot Point S1	1.3142
Daily Pivot Point S2	1.3101
Daily Pivot Point S3	1.306
Daily Pivot Point R1	1.3225
Daily Pivot Point R2	1.3267
Daily Pivot Point R3	1.3308

Author

Patricio Martín

FXStreet

Patricio is an economist from Argentina passionate about global finance and understanding the daily movements of the markets.

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