USD/CAD Price Analysis: Pullback towards sub-1.3400 zone appears more impulsive as US PPI looms

• USD/CAD remains pressured at intraday low after volatile Thursday.
• Convergence of 200-DMA, five-month-old falling resistance line challenge Loonie pair buyers.
• 100-DMA, multiple levels marked since early June join bullish MACD signals to prod sellers.
• More clues of US inflation eyed for clear directions.

USD/CAD clings to mild losses around 1.3430 during early Friday, following the failure to cross the key upside hurdle despite an interesting bullish close to the volatile day. In doing so, the Loonie pair justifies technical signals while waiting for additional details to confirm the recent dovish bias about the Federal Reserve (Fed), especially after the previous day’s downbeat US data.

Among the US statistics, the Producer Price Index (PPI) for July and the first readings of the University of Michigan’s (UoM) Consumer Sentiment Index (CSI) for August will be crucial to watch for clear directions.

Also read:

That said, USD/CAD reverses from a joint of the 200-DMA and a downward-sloping resistance line from May 31, close to 1.3450 by the press time.

However, the bullish MACD signals suggest limited downside room for the Loonie pair, which in turn highlights a convergence of the 100-DMA and a two-month-old horizontal support zone, close to 1.3390-80.

It’s worth noting that the quote’s downside break of 1.3380 will make it vulnerable to drop toward April’s low of around 1.3300.

On the contrary, a daily closing beyond the 1.3450 resistance confluence could quickly propel the USD/CAD prices to the monthly high marked on Monday at around 1.3505.

Following that, tops marked in May and April, respectively near 1.3655 and 1.3670, will be in the spotlight.

USD/CAD: Daily chart

Trend: Limited downside expected