USD/CAD trades calmly at 1.3686 ahead of US Retail Sales data

• USD/CAD trades between 1.3660 and 1.3705 during Wednesday's session.
• Cautious optimism in the market, and a pullback in yields weigh on the US Dollar.
• Daily RSI(14) at 58.392, suggests a moderate bullish momentum for USD/CAD.

Daily price movements:

USD/CAD sees a slightly positive intraday movement on Wednesday, with the last recorded price at 1.3686 at the time of press. The currency pair started the session at 1.3684, the previous close, and oscillated between the lowest intraday price of 1.3660 and the highest intraday price of 1.3705. The overall intraday price change stands at +0.02% at press time.

Key economic events:

Focusing on the US February Retail Sales report on Wednesday at 12:30 GMT is critical.

Additionally, February's upcoming Canadian Housing Starts data will influence short-term USD/CAD fluctuations. The official crude oil inventory report from the US Energy Information Administration will also play a crucial role for the USD/CAD pair.

In light of the Silicon Valley Bank’s (SVB) catastrophic failure, market participants expect the Federal Reserve (Fed) to take a more cautious approach to monetary policy. This expectation arises from the possibility that the Fed may seek to avert further rate hikes to minimize the risk of additional bank collapses.

Recently, officials from Japan, Canada, and the US have dismissed rumors regarding the bleak state of their respective banks in the wake of the recent fallout involving Silicon Valley Bank (SVB) and Signature Bank.

Technical View:

USD/CAD pair has been trading above its daily 20-SMA (1.3613) and 50-SMA (1.3483), indicating a bullish short- to medium-term trend. The currency pair tested the 38.2% Fibonacci level at 1.3689 but failed to reach the 61.8% Fibonacci level at 1.3713, suggesting some resistance near the latter level.

The daily RSI(14) of 57.709 indicates a moderately bullish momentum as the pair continues to trade above the 50 mark. However, the market may face some resistance, as the daily resistance levels are 1.3740, 1.3794, and 1.3838.

The daily pivot point for the USD/CAD pair is 1.3696, almost equal to the last intraday price at press time. The daily support levels are found at 1.3641, 1.3597, and 1.3543. If the pair manages to break above the pivot point, it may test the resistance levels, while a break below the pivot point could trigger a test of the support levels.