USD/CAD recovers some lost ground near 1.3590, investors await US CPI data

USD/CAD holds positive ground around 1.3590 amid the light economic data released.
Market players expect the Federal Reserve (Fed) to hold interest rates in its September meeting.
Bank of Canada (BoC) Governor said monetary policy may be appropriately restrictive to restore price stability.
Investors will closely watch the US Consumer Price Index (CPI) data.

Lallalit Srijandorn FXStreet

The USD/CAD pair recovers some lost ground but remains below the 1.3600 mark during the early Asian session on Tuesday. The pair snaps two-day losing streaks and currently trades near 1.3588, gaining 0.12% on the day.

The US Dollar attract some sellers on Tuesday amid the light economic data released. It’s worth noting that the labor data last week lends support to the higher for longer interest rate narrative in the US. The markets have been priced in the possibility of a 92% chance of a rate hold at the September meeting and a 42.4% chance of a rate hike at the November meeting, according to the CME FedWatch Tool. This, in turn, might lift the US Dollar (USD) and cap the upside of the USD/CAD.

US Treasury Secretary Janet Yellen said on Sunday that she is becoming more convinced that the US will be able to curb inflation without causing major impacts on the labor market. She added that every gauge of inflation is erasing and there was no massive wave of layoffs.

On the other hand, Bank of Canada (BoC) Governor Tiff Macklem stated on Thursday that monetary policy may be appropriately restrictive to restore price stability, but cautioned that the Governing Council is concerned with the persistence of underlying inflation. It’s worth noting that BoC decided to maintain its key interest rate at 5% last week. Meanwhile, a rally in oil prices supports Loonie’s upside as Canada is the largest exporter of crude to the US.

Moving on, the US Consumer Price Index for August and Retail Sales will be released on Wednesday and Thursday, respectively. There will be no top-tier economic data released from the Canadian docket, the USD price dynamics will continue to drive the USD/CAD pair. Traders will take cues from the figures and find trading opportunities for the pair.

Technically, USD/CAD holds above the key 100-hour Exponential Moving Average (EMA) on the daily chart, which supports the buyers for the time being. The first immediate level is seen at 1.3600 (a psychological round mark) and the initial support level is located at 1.3550 (a low of August 30).

USD/CAD

Overview
Today last price	1.3591
Today Daily Change	0.0019
Today Daily Change %	0.14
Today daily open	1.3572

Trends
Daily SMA20	1.3574
Daily SMA50	1.3394
Daily SMA100	1.3406
Daily SMA200	1.3467

Levels
Previous Daily High	1.3639
Previous Daily Low	1.3561
Previous Weekly High	1.3694
Previous Weekly Low	1.3576
Previous Monthly High	1.364
Previous Monthly Low	1.3184
Daily Fibonacci 38.2%	1.3591
Daily Fibonacci 61.8%	1.3609
Daily Pivot Point S1	1.3542
Daily Pivot Point S2	1.3513
Daily Pivot Point S3	1.3465
Daily Pivot Point R1	1.362
Daily Pivot Point R2	1.3669
Daily Pivot Point R3	1.3698

Author

Lallalit Srijandorn

FXStreet

Lallalit Srijandorn is a Parisian at heart. She has lived in France since 2019 and now becomes a digital entrepreneur based in Paris and Bangkok.

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