The USDCAD pair, currently trading at 1.31675, is showing signs of weakness as the US Dollar struggles. Its immediate support level of 1.3160 is at risk.

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• USD/CAD is looking vulnerable above the immediate support of 1.3160 amid weakness in the US Dollar.

The pair currently trades last at 1.31675.

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 is struggling in maintaining an auction above 1.3150 in the early European session. The Loonie asset is failing to pick strength as the upside in the US Dollar Index (DXY) seems restricted due to easing inflationary pressures in the United States economy.

The recovery move in the USD Index seems fragile due to an absence of supportive fundamentals. The fight against United States inflation by the Federal Reserve (Fed) is still on and the central bank is ready to raise interest rates further. Also, US retail demand is not at its best as households have postponed demand for big-ticket items to fulfill basic needs.

Meanwhile, there is some strength in the Canadian Dollar despite inflationary pressure in Canada has eased further. June’s core Consumer Price Index (CPI) reported monthly disinflation by 0.1% against expectations of 0.5%. This would allow the Bank of Canada (BoC) to keep interest rates steady ahead.

USD/CAD has faced selling pressure to near the 20-period daily Exponential Moving Average (EMA) at 1.3230 after attempting a recovery move from around 1.3100. The Loonie asset is expected to continue its downside journey towards the horizontal support plotted from 12 May 2022 high at 1.3077.

The Relative Strength Index (RSI) (14) is on the edge of 40.00. A slippage below the same would trigger the downside momentum.

Should the asset break below June 27 low at 1.3117, Canadian Dollar bulls would drag the asset towards 12 May 2022 high at 1.3077, followed by the psychological support at 1.3000.

In an alternate scenario, a confident recovery above June 28 high at 1.3277 would drive the asset toward June 15 high at 1.3355 and July 7 high at 1.3387.

Technical Levels: Supports and Resistances

USDCAD currently trading at 1.3168 at the time of writing. Pair opened at 1.3169 and is trading with a change of -0.01 % .

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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