USD/CAD Price Analysis: Sings last prayer above 1.3500 despite BoC to announce an unchanged policy
- USD/CAD is juggling in a narrow range above 1.3500 after a sell-off move ahead of US Inflation.
- BoC Macklem to keep rates steady as Canada’s inflation is softening consistently.
- Investors’ risk appetite is improving as investors are digesting one more rate hike from the Fed.
The USD/CAD pair has turned sideways after a perpendicular decline move above the psychological resistance of 1.3500 in the early Tokyo session. The Loonie asset is expected to remain on the tenterhooks ahead of the interest rate decision by the Bank of Canada (BoC) and the United States inflation data, which are scheduled for Wednesday.
BoC Governor Tiff Macklem might stick to its plan of keeping rates steady as Canada’s inflation has been declining consistently.
Investors’ risk appetite is improving as investors are digesting one more rate hike from the Federal Reserve (Fed) in its next month’s policy meeting due to the tight labor market. S&P500 futures have added some gains in early Asia after a recovery move on Monday. The US Dollar Index (DXY) showed a gradual correction after failing to surpass to reclaim the critical resistance of 103.00.
USD/CAD has dropped near the lower portion of the Rising Channel chart pattern formed on an hourly scale. The lower portion of the aforementioned chart pattern is plotted from April 04 low at 1.3406 while the upper portion is placed from April 04 high at 1.3467.
The 20-period Exponential Moving Average (EMA) at 1.3512 is barricading the US Dollar from a recovery.
Meanwhile, the Relative Strength Index (RSI) (14) has slipped back into the 40.00-60.00 range after an attempt of climbing above 60.00, indicating the presence of aggressive sellers at elevated levels.
Should the asset break below April 10 low at 1.3485, Canadian Dollar bulls would further drag the Loonie asset toward April 06 low at 1.3452 followed by April 04 low at 1.3406.
On the contrary, a decisive break above April 10 high at 1.3554 will drive the asset toward the round-level resistance at 1.3600. A breach of the 1.3600 resistance will expose the asset to March 23 low at 1.3630.