The USDCAD pair remains steady around 1.3540 amidst a cautious market sentiment.

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• USD/CAD trades flat around 1.3540 amid the cautious mood.

The pair currently trades last at 1.35419.

The previous day high was 1.3575 while the previous day low was 1.3524. The daily 38.2% Fib levels comes at 1.3556, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1.3544, expected to provide resistance.

The USD/CAD pair trades sideways above the 1.3500 mark after reaching the highest level since May during the early Asian session on Monday. The pair currently trades near 1.3542, losing 0.08% on the day. Meanwhile, a decline in oil prices undermines the Canadian Dollar since Canada is the largest oil exporter to the United States.

The stronger US Retail Sales and robust labor data strengthen the case for another interest rate rise by the Federal Reserve (Fed). FOMC Minutes emphasized last week that inflation remained unacceptably high and additional monetary policy tightening may be required to bring inflation to the target.

On the other hand, the Canadian Producer Prices for July increased by 0.4%, contrasting June’s -0.6% drop on the back of oil price increases. Meanwhile, Raw Material Prices rose by 3.5% in Jul from 11.1% year-to-date. Canada’s investment and employment data seem dismal compared to the US economic data, which weighs on the Loonie and acts as a tailwind for the USD/CAD pair.

However, the People’s Bank of China (PBOC) said on Sunday that China would arrange financial support to resolve local government debt worries, according to Reuters. The positive development might alleviate the concern about the spillover effects of China’s debt crisis and real-estate woes. This, in turn, could limit the downside of the Loonie and acts as a headwind for the USD/CAD pair.

Market participants await the monthly Canadian Retail Sales for June due on Wednesday. However, the Federal Reserve (Fed) Chairman Jerome Powell Speaks at the Jackson Hole Symposium on Friday will be the highlight this week. The event will be critical for determining a clear movement for the USD/CAD pair.

Technical Levels: Supports and Resistances

USDCAD currently trading at 1.3538 at the time of writing. Pair opened at 1.3552 and is trading with a change of -0.1 % .

The pair remains strongly bullish on the daily timeframe. It trades above its 20 SMA @ 1.3363, 50 SMA 1.3282, 100 SMA @ 1.3385 and 200 SMA @ 1.3453.

The previous day high was 1.3575 while the previous day low was 1.3524. The daily 38.2% Fib levels comes at 1.3556, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1.3544, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 1.3526, 1.35, 1.3476
• Pivot resistance is noted at 1.3577, 1.3601, 1.3627

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