USD/CAD Price Analysis: Loses traction below the 1.3540 mark, eyes on the key support level at 1.3500
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- USD/CAD struggles to gain and holds below the mid 1.3500s in the early European session.
- The pair holds below the 50-hour EMA; the Relative Strength Index (RSI) stands below 50.
- The critical support level is located at 1.3495-1.3510 region; the immediate resistance level is seen at 1.3575.
The USD/CAD pair loses traction and edges lower to 1.3532 heading into the early European session on Tuesday. Investors will look to Friday's speech by Fed Chairman Jerome Powell for direction and perhaps insight into the state of the economy. Market participants are placing bets on a 40% likelihood of a last Fed rise by November, according to Reuters.
From the technical perspective, USD/CAD trades within the ascending trend-channel since August 9 on the one-hour chart. Further downside for USD/CAD looks favorable as the pair holds below the 50-hour Exponential Moving Average (EMA). Meanwhile, the Relative Strength Index (RSI) stands below 50, activating the bearish momentum for the USD/CAD pair for the time being.
That said, the critical support zone for USD/CAD is located at 1.3495-1.3510, portraying a confluence of a lower line of an ascending trend-channel, a low of August 21, and a psychological round figure. Further south, the next stop to watch is at 1.3475 (Low of August 16) en route to 1.3445 (Low of August 15) and finally at 1.3410 (Low of August 11).
On the upside, the immediate resistance level for the pair is seen at 1.3575 (high of August 18). The key barrier to watch is the upper boundary of the ascending trend-channel and psychological figure at 1.3600. Any follow-through buying above the latter will see a rally to 1.3650 (a high of May 31).
USD/CAD one-hour chart
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