The USDCAD pair is still under pressure and holding near the 1.3170 level.

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• USD/CAD remains on the defensive near the 1.3170 mark.

The pair currently trades last at 1.31663.

The previous day high was 1.3244 while the previous day low was 1.3167. The daily 38.2% Fib levels comes at 1.3196, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1.3214, expected to provide resistance.

The USD/CAD pair remains under pressure and currently trades around 1.3160 regions in the early Asian session. The weakening US Dollar is backed by the Industrial Production surprises to the downside and the softer inflation data last week. Investors will look to the Canadian Retail Sales m/m for fresh impetus.

The Canadian Consumer Price Index (CPI) fell to 2.8% YoY in June, down from 3.4% in May. This number was lower than the market’s expectation of 3%. The CPI rose 0.1% MoM, compared to market expectations of a 0.3% increase. Additionally, the monthly Core CPI, which excludes volatile food and energy prices, fell 0.1%, while the annual Core CPI stood at 3.2%, down from 3.7% in May.

The softer Canadian core inflation exerts some pressure on the Loonie as the data lowers the possibility that the Bank of Canada (BoC) will raise interest rates at its September meeting. Nevertheless, the Canadian Dollar (CAD) recovers against the US Dollar. A reversal in crude oil prices help limit the loss in the commodity-linked Loonie and weighed on the USD/CAD pair.

Additionally, the release of US Industrial Production data for June surprises to the downside and shows a prolonged decline of industrial output. On Tuesday, the US Federal Reserve reported that Industrial Production fell 0.5% in June for the second month. This figure was lower than the market expected of no change.

Also, Retail sales in the United States increased 0.2% MoM in June to $689.5 billion, according to data released by the US Census Bureau. This report came in below the market’s forecast of a 0.5% gain. On the positive side, the 0.3% growth figure recorded in May was revised up to 0.5%.

Looking ahead, the Canadian Retail Sales m/m will be keenly watched. The softer data might cap the downside for the USD/CAD pair. On the US docket, the Unemployment Claims will be released on Thursday.

Technical Levels: Supports and Resistances

USDCAD currently trading at 1.3172 at the time of writing. Pair opened at 1.3169 and is trading with a change of 0.02 % .

The pair remains strongly bearish on the daily time frame. It trades below the 20 SMA @ 1.322, 50 SMA 1.335, 100 SMA @ 1.3463 and 200 SMA @ 1.3486.

The previous day high was 1.3244 while the previous day low was 1.3167. The daily 38.2% Fib levels comes at 1.3196, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1.3214, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 1.3143, 1.3117, 1.3067
• Pivot resistance is noted at 1.3219, 1.3269, 1.3295

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