In Asian trading on Tuesday, USD/CAD is developing moderate upward dynamics. The pair is retreating from the local lows of October 18 and in the moment is heading towards 1.3850.
Today investors are waiting for the release of the US inflation report. It is expected to decline from 0.4% to 0.1% (m/m) and from 3.7% to 3.3% (y/y). Core figures are likely to remain at 0.3% and 4.1%. If the actual figures match the expected ones, the Fed will have an additional argument in favor of ending the monetary restriction cycle.
Also today, the deputy governor of the Bank of Canada will speak. Tony Gravelle is expected to outline the prospects for the regulator's monetary policy. Analysts believe that the Bank of Canada will start reducing interest rates from the middle of 2024.
Technical analysis for USD/CAD for today
On the USD/CAD daily chart, the Bollinger Band Indicator remains in a horizontal flat while the MACD still maintains a weak buy signal. The Stochastic oscillator unsuccessfully tested the 80% level on the upside, pushed away from it and reversed to the downside.
If the pair consolidates above 1.3853, we open long positions with take profit at 1.3950. Stop loss will be set at 1.3800.
In case of a break below the support at 1.3750, we move to sales with the target at 1.3650. Stop-loss is set at 1.3800.