USD/CAD Price Analysis: Gains momentum above the 1.3450 mark ahead of the Canadian CPI

• USD/CAD gains momentum, trades on a positive note for the fifth consecutive week on Monday.
• The pair holds above the 50- and 100-hour Exponential Moving Averages (EMA).
• 1.3500 is the key resistance level to watch; 1.3430 acts as an initial support level for the pair.

The USD/CAD pair trades in positive territory in the Asian trading hours on Monday. The uptick in the pair is bolstered by mixed US economic data and the rise in US 10-year Treasury bond yields. Meanwhile, the uptick in oil prices supports the Loonie against the US Dollar. The major pair currently trades near 1.3457, gaining 11% for the day. Market participants will keep an eye on the Canadian Consumer Price Index (CPI) YoY for July on Tuesday. The figure is expected to rise from 2.8% to 3.0% on a yearly basis.

From the technical perspective, USD/CAD holds above the 50- and 100-hour Exponential Moving Averages (EMA), which means further upside looks favourable.

Any follow-through buying beyond 1.3470 (the upper boundary of the Bollinger Band) could pave the way to 1.3500, highlighting a psychological round figure and a high of August 8. Any meaningful follow-through buying above the latter will see a rally to the next barrier at 1.3550 (high of May 23), en route to 1.3650 (high of May 31).

On the flip side, 1.3430 (the midline of the Bollinger Band) acts as an initial support level for USD/CAD. The 1.3390–1.3400 zone will be the key contention level to watch. The mentioned level is the confluence of the lower limit of the Bollinger Band, a psychological round mark, and the 50-hour EMA. Any extended weakness below the latter will challenge the next downside filter at 1.3340 (the 100-hour EMA). The additional downside filter is located at 1.3300 (high of August 1, a psychological figure).

However, the further upside appears favourable as the Relative Strength Index (RSI) stands above 50, activating the bullish momentum for the USD/CAD pair for the time being.

USD/CAD four-hour chart