- USD/CAD rebounds after building a base around 1.3400 as the market mood turns cautious.
- US headline inflation for July is expected to rebound as oil prices recovered sharply last month.
- USD/CAD shifts auction above the 1.3387 resistance, which turns into a support for the US Dollar bulls.
The USD/CAD pair attempts to break the consolidation above the round-level support of 1.3400 in the European session. The Loonie asset finds strength as the US Dollar rebounds after discovering a cushion near 102.30.
Bearish sentiment revives as investors turn cautious ahead of the United States inflation data, which will be released on Thursday at 12:30 GMT. US headline inflation for July is expected to rebound as oil prices recovered sharply last month.
July’s inflation data is expected to build a base for Federal Reserve’s (Fed) September monetary policy as sticky price pressures would force policymakers to consider an extension of policy-tightening.
USD/CAD shifts auction above the horizontal resistance plotted from July 07 high at 1.3387 on a four-hour scale, which turns into a support for the US Dollar bulls. The Loonie asset is approaching the next resistance plotted around 1.3650. Upward-sloping 20-period Exponential Moving Average (EMA) at 1.3400 provides support to the US Dollar.
The Relative Strength Index (RSI) (14) oscillates in a 40.00-60.00 range, which indicates a consolidation ahead.
Mean-reversion move to near 1.3400 would be a buying opportunity for the US Dollar bulls. This would drive the asset toward June 05 high at 1.3462 followed by the psychological resistance at 1.3500.
In an alternate scenario, a downside move below July 18 high at 1.3288 would drag the asset toward July 27 low around 1.3160 and July 14 low marginally below 1.3100.
USD/CAD four-hour chart
-638271826616214793.png)
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD stays weak below 1.0750 ahead of EU inflation data
EUR/USD is trading pressured below 1.0750, halting its three-day winning streak on Tuesday. The extended US Dollar recovery coupled with a softer risk tone undermines the pair, as traders brace for EU inflation data, US jobs report and Fed Chair Powell's speech later in the day.
GBP/USD remains confined in a range near 1.2650 ahead of key US events
GBP/USD stays defensive near 1.2650, extending its struggle early Tuesday. Bets for a BoE rate cut in August act as a headwind amid a modest US Dollar recovery. Traders prefer to wait on the sidelines ahead of the US jobs data and Fed Chair Powell's appearance.
Gold buyers take out $2,330 hurdle ahead of US jobs data, Powell
Gold price is looking to build on the previous upswing in the Asian session on Tuesday. Gold buyers, however, could turn cautious heading into the key US JOLTs Job Openings data and US Federal Reserve Chair Jerome Powell’s speech later in the day.
Polkadot price primed for upside surge following descending trendline breakout
Polkadot broke out from a descending trendline on Monday, marking a 1.5% increase to $6.42 on Tuesday. Potential buyers on the sidelines eyeing opportunities can consider accumulating DOT between $5.41 and $5.72.
Eurozone Inflation Preview: Price pressures expected to ease after May bounce Premium
Eurostat will release crucial European inflation data on Tuesday. Headline inflation is expected to recede in June. Uncertainty prevails regarding future rate cuts by the ECB.